Financial Services: American Express

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For students, the student credit cards are the best way to enter the fascinating world of credit cards. Student credit cards help the students in taking advantage of the various benefits associated with credit cards in general e.g. convenience, safety, rebates etc., much earlier in their life. Moreover, student credit cards act as training ground for students, most of whom haven’t had any experience with credit cards. The student credit cards help the students in gaining hands-on knowledge about the various aspects of credit cards and their use. Most credit card suppliers also include a small guide that helps the students in gaining a good understanding of credit cards, upfront. The students learn more and more with every transaction on their student credit card and as they experiment with the various benefits associated with the student credit cards using their student credit cards in various ways. Another important benefit is in terms of the time that student credit cards save for the students. As we know, time is very valuable for students and by using their student credit card to order things online, they can actually save a lot of time too. Moreover, the students might require short term loans (in case there is a delay in the arrival of funds in their account, for whatever reason); and student credit cards facilitate this very easily taking the burden off from the student (so students can use their student credit cards like a loan for making payments in the meantime). As such, money is the other critical thing for students. Student credit cards again become handy here by saving them some money in terms of rebates from retail stores, grocery shops etc. Moreover, the students also receive additional rewards/benefits from the members reward programmes that come with all credit cards (including student credit cards).

As students use their student credit cards, they keep building their knowledge database. This knowledge becomes handy when they are out of college and into their job and looking for a full-fledged credit card (i.e. credit cards which have lesser restrictions, more credit limit etc as compared to a student credit card). Hence the student credit cards help the students in making a knowledge-based decision rather than a fancy-based one. Such decisions and the knowledge about using the credit cards in a disciplined manner, acts as a deterrent to one of the most serious problems being faced by credit card industry i.e. the problem of credit card debt.

With so many advantages on the plate, the student credit cards are really an essential for every student.

Image via WikipediaPut simply, a credit card is just a small piece of plastic that easily fits in your wallet. Well, it’s not ‘just a piece of plastic’; it’s a very powerful piece of plastic which can be regarded as a compressed form of cash. We can define credit cards as a credit system that allows the consumer to borrow money on the fly from a bank or a financial institution and use it to make payments to the merchants.

In order to obtain a credit card, the consumer needs to fill-in an application form that is actually like an agreement between the credit card supplier and the credit card consumer. The credit card supplier approves the application form and provides the consumer with a small piece of plastic (i.e. the credit card). This plastic (or credit card) contains electronically encoded security information in the form of a magnetic strip (which is generally located at the back of the credit card). This information is used for authorising payments whenever the consumer uses the credit card. The consumer can use the credit card for shopping at merchant outlets or on the internet etc. Of course, this is subject to merchant’s capability to accept credit card payments. Accepting the credit cards is, however, not enough. The merchant should be able to accept payments made through the credit card provided by that credit card organization (of which you hold the credit card) i.e. VISA, MasterCard etc. You can also use credit card to withdraw cash from ATMs (automatic cash machines) – also known as cash machines or Day/Night machines.

There are eight main credit card organisations and most of them operate in a lot of countries world wide. These are American Express, Citi, Diners Club, Discover, JCB, MasterCard and VISA. Master card and VISA are probably the most popular ones. Then there are credit card suppliers or issuers who have tie-ups with these organisations and issue credit cards on their behalf e.g. you have various banks that issue VISA cards (like HSBC VISA card)

To make a payment using a credit card, the credit card has to be either swiped into special credit card processing machine (when shopping in person at shops) or the details of the credit card have to be entered on the merchant’s website (when shopping online). The credit card supplier sends across the bill for these transactions to the consumer who is then required to pay either the full amount or a partial (minimum) amount. If you pay in full, the credit card supplier doesn’t charge any interest on the amount you owe, otherwise the pre-agreed interest rate is charged. If you don’t pay even the minimum, you might land up with a late fee too. Moreover, the credit card supplier generally puts a limit on the maximum amount you can spend per month using your credit card.