The Popularity Of Credit Cards

A woman is shown paying for her shopping at a store with a credit card
Online Loans And Types Of Credit
Part 1 Different Types Of Credit
Part 2 The Popularity Of Credit Cards
Part 3 Applying For A Credit Card
Part 4 Personal Loans Online – What You Need To Know

Before the technological genius of the Internet, the local bank was the first port of call for anyone wanting to borrow money. Arranging a mortgage could take months. Even opening a straightforward bank account involved a trip to the bank, time spent filling in lots of forms and after that you could spend hours queuing at the teller counter to deposit checks or make cash withdrawals. In this article we examine:

  • Credit and banking before the internet
  • Online credit cards
  • Why credit cards have become popular
  • Opening a credit card account online

Credit was often dependent upon the whim of the bank manager and only those with a good relationship would have a chance of getting a loan. Of course, this was before the days of credit cards and the introduction of these useful financial tools has changed the way in which people can now get credit.

The most popular kind of credit

Credit cards are the most popular form of borrowing in the US. Unlike European countries where many people prefer to pay for goods using a debit card, Americans make use of credit cards on a daily basis. One of the reasons for their popularity is that they are practical but there are also other factors involved.

Why are credit cards so popular?

One of the most cited reasons for using credit cards is that they are safe. Lenders offer convenience and you are entitled to a refund if the card has been stolen and used for a fraudulent transaction.

A man is shown shopping online with the use of his credit card on his laptop

Many cards have reward schemes which give you points to spend in department stores, car insurance on automobile rentals or air miles to use for flights. There is no need to check your bank balance to make sure you can afford the item being bought and having a credit card is useful for building up that all important credit rating.

Lenders offer convenience and you are entitled to a refund if your credit card has been stolen and used for a fraudulent transaction.

Using a card to pay for items also means that it is easy to reverse the transaction if the seller behaves badly or there is a possibility of fraud. Unlike the spending habits that are familiar in other countries, Americans prefer to carry cards and do not like carrying around cash. This is another reason why there are more credit cards in the US than in any other country. The final reason for credit card popularity is simply that banks aggressively market these cards making it very simple to open an account.

Opening a credit card account online

The huge amount of lenders which now offer credit cards online has given applicants far more choice. However, some people are reluctant to use an online platform and many are confused by the different benefits that are on offer. There are some key questions that you can ask yourself before applying for a credit card online and these will help you to choose the right option.

Before you make a credit card application

If you have a top rated credit score you can virtually choose whichever credit card you want. If your credit rating is less than perfect you will not have so much choice and will probably be asked to pay a higher rate of interest. Before you make an application think about why you want a card and how you plan to use it. If you want a card to help improve your credit rating then careful planning about spending is required.

Credit cards are the most popular form of borrowing in the US

Interest free credit is available if you pay off the full balance each repayment date but if you can only afford to pay a certain proportion of your salary each month, you will have to keep to that limit. If earning reward points is important you may have to sacrifice a lower rate of interest and most of these kinds of card accounts involve paying either a monthly or an annual fee. All of these factors should be closely considered before making any application for a credit card.

Online Loans And Types Of Credit
Part 1 Different Types Of Credit
Part 2 The Popularity Of Credit Cards
Part 3 Applying For A Credit Card
Part 4 Personal Loans Online – What You Need To Know

About the author

Mark Larsen

Mark Larsen has worked in the finance industry for over 20 years. Over the course of his career, Mark has amassed experience in personal finance and especially short-term lending. He shares his valuable insights on onlinecreditusa.com