Types of Credit Cards

Types of credit cards

Card types have multiplied in recent years; find the right one for youBy Emily Starbuck Gerson and Ben Woolsey
When you look back at the history of credit cards, they started out simple and standard: Each issuer produced one card with one set of features. Today, credit cards come in multiple levels with ranging interest rates, fees and reward programs, so before you fill out an application, it's important to know which will best suit your financial situation and lifestyle.
The following is a brief description of the most common types of credit cards available.

Standard credit cards
Balance transfer credit cards
Low interest credit cards
Credit cards with rewards programs
Cash back credit cards
General reward points credit cards
Hotel/travel points credit cards
Retail reward credit cards
Gasoline points / rebates credit cards
Automobile manufacturer reward credit cards
Home improvement rewards credit cards
Airline miles / frequent flier credit cards
Airline-specific credit cards
Generic airline miles cards
Credit cards for bad credit
Secured credit cards
Prepaid debit cards
Specialty credit cards
Business credit cards
Student credit cards
Standard credit cards

These credit cards are the most common and are readily available from most banks and financial groups. They are unsecured, which means you do not have to put down a security deposit to prove the money can be repaid. The way the annual percentage rate is offered or calculated for these cards can vary. Here are two examples:
Balance transfer credit cards Balance transfer credit cards allow consumers to transfer a high interest credit card balance onto a credit card with a low interest rate. Typical in the market today are balance transfer credit cards with an introductory annual percentage rate (APR) of 0 percent, with that introductory or "teaser" rate lasting several months up to a year. The terms of balance transfer credit cards varies between offers, so be sure to thoroughly read the terms and conditions for each card. Compare balance transfer credit cards. Low interest credit cards Low interest credit cards offer either a low introductory APR that jumps to a higher rate after a certain period, or a single low fixed-rate APR. Low interest cards can be very useful when consumers need make a large purchase because it allows several months to a year to pay it off with very low or no interest. Before using a low interest card, read all the terms and conditions of the introductory rate so you will not be surprised by fees or accumulated interest. Compare low interest credit cards. Credit cards with rewards programsReward credit cards allow users to earn incentives for making purchases with their credit card. Points accumulate for each dollar charged on the card, and cardholders can redeem these points for various rewards. Reward cards usually require better-than-average credit for approval. There are seven major types (not including airline miles / frequent flier cards, which we'll discuss a bit later).
Cash back credit cards This type of credit card allows you to earn cash rewards for making purchases. The more the card is used, the more cash rewards you receive. Most cash back cards earn users around 1 percent of total purchases, excluding interest and finance charges. Some cards offer a higher cash back percentage with increased usage; others offer a higher cash back percentage at select merchants or for particular types of purchases. Since cash back programs are costly to credit card companies, some of these cards have an annual fee that can vary from $50 to $100. This type of card is best for people who are faithful about paying off their balances each month. If used appropriately, a cash back credit card can earn the cardholder a significant amount of money over time. Compare cash back credit cards. General reward points credit cards Reward credit cards are similar to cash back cards in that cardholders can accumulate points toward a reward structure, which is based on how much the card is used over time. General reward cards offer cardholders a variety of items to cash points in for: gift cards, electronics, hotel stays, plane tickets, jewelry, pet supplies and more. Some rewards can be attained for 1,500 points; others cost 200,000 points. Reward programs and promotional offers often change; thoroughly review a card's terms and conditions before applying. Some general reward credit cards come with an annual fee ranging from $50 to $100, although most have no annual fee. Reward cards are best for people who regularly pay off their balances each month. By minimizing their finance charges, individuals will reap greater benefits from the associated rewards credit card. Compare reward points credit cards. Hotel or travel points credit cardsThis is a genre of credit cards specific to hotels and travel. Some cards are co-branded with hotels, such as the Marriott Rewards Visa card, or the Hilton HHonors American Express card. These credit cards allow you to earn points for all purchases, in addition to bonus points for dollars spent on stays at the respective hotel chain. You can redeem your points for free nights and upgrades at the hotel chain your card is co-branded with. Then there are broader hotel and travel cards such as the Bank of America's MilesEdge Visa, with which points can be redeemed for travel, theme park admission, stays at major hotel chains and more. Blue Sky from American Express is similar -- points can be applied toward plane tickets, hotel stays, rental car use or cruises. Because these reward programs can be costly for credit card companies, many of these cards come with an annual fee. If you are not a frequent traveler, the annual fee may negate the benefit of the rewards earned. Compare hotel/travel points credit cards. Retail rewards credit cardsThese credit cards are co-branded with a major retailer, such as Disney, Amazon.com or Best Buy. Points are accumulated by making everyday purchases, though cardholders are awarded with double or triple points for making purchases from the co-branded retailer. Reward points must be redeemed for products or services from that specific retailer. With the Best Buy MasterCard, for example, you earn up to 2 percent back from any purchase with the card, and 4 percent back from Best Buy purchases. Cardholders receive the reward money in the form of reward certificates that can be used only at Best Buy. With the Disney Visa card, points accumulate for every purchase, and they can be redeemed for Disney products or vacations. Compare retail rewards credit cards. Gas cards with points or rebatesGas cards come in two species: general and brand-specific. General cards treat all gas companies equally, while brand-specific cards favor one gas company. The Discover Open Road card, a general gas rebate card, gives you 1 percent cash back for general purchases but rewards you with 5 percent back for buying gas or having auto maintenance done at any company. The BP Visa, in contrast, will give you a 1 or 2 percent rebate for regular purchases, but you will earn 5 percent rebate only when buying gas at BP stations.If you tend to be loyal to a certain gas company, a brand-specific card may benefit you, but if you tend to just stop at whichever station is closest, you may be best with a general gas rebate card. Additionally, it's important to remember that a gas company may be very popular in one state, but uncommon or nonexistent in other states, making brand-specific credit cards less than ideal for long road trips. For example, BP is a very common gas station in Florida, but there are few of them in Texas. Sinclair gas stations are in 21 states, but if you have a Sinclair MasterCard and are driving through California, you're out of luck. Compare gas cards. Automobile manufacturer rewards cardsAuto rewards cards allow consumers to earn points that can be redeemed toward the purchase of a new or used car, auto-related expenses or merchandise. With the GM Flexible Earnings MasterCard, for example, cardholders can opt for cash back rewards, or apply their earnings toward the purchase of a new GM vehicle. This card is most beneficial to those looking to purchase a vehicle in the near future. Compare auto rewards cards. Home improvement rewards credit cardsThese credit cards allow consumers to earn reward points for all purchases, while earning extra points for home-related expenditures. For example, with the Citi Home Rebate MasterCard, you earn 1 percent back on regular purchases, but 6 percent back on purchases involving utilities, cable/satellite TV, Internet connection and telecom for the first year. Rebates earned are automatically applied to your mortgage principal. Bank of America's Home Advantage World MasterCard works the same way, though points can be redeemed for cash back, travel, gift cards, merchandise if you decide not to apply them to your mortgage. Compare home improvement rewards cards. Airline mile / frequent flier credit cards While certain general reward credit cards allow points to be redeemed for plane tickets among other things, there is a subset of reward cards specifically for air travel. This type of card allows consumers to earn airline mile credits whenever they make purchases. Some cards are co-branded with a specific airline, while some are generic and can be redeemed for tickets with a variety of airlines. Points can be redeemed for airline travel, much like frequent flier miles.
Airline-specific credit cards These cards are associated with one airline. Typically, the cardholder accumulates points from both making purchases with the card and by flying on the specified airline. For example, with Chase's Continental MasterCard, cardholders accumulate Continental frequent flier miles (called OnePass miles) both from spending with the card and from flying with Continental. These cards come with other perks -- for example, some allow you to earn double points when you use the card to purchase plane tickets with that airline. Compare airline-specific cards. Generic airline miles cardsCredit cards such as Miles by Discover allow you to redeem your reward points for air travel through any airline, travel agent or online travel site. This is a great option for people who aren't involved in a frequent flier program and aren't loyal to any particular airline. It allows you the flexibility of redeeming your miles for whichever airline best suits the needs of your trip. With a generic airline card, you gain points for every dollar spent on the card, but because it is not associated with a particular airline, you can't gain additional points by flying. Compare generic airline miles cards. Each airline credit card is a bit different, so be sure to read the card's terms and conditions to find out how many miles you gain for every dollar spent. Other things to look for are how many miles you need before you qualify for a free plane ticket, if there is a cap on points that can be earned annually and whether or not unused airline miles expire. Some expire in five years while others do not expire at all. Airline mile reward programs can be costly for credit card companies, so many of these cards come with an annual fee. This type of reward program is beneficial for frequent travelers or those who want to use their card to plan vacations, but the associated fee might make them impractical for other cardholders.
Bad credit and/or credit repair cardsCredit can easily go from good to bad due to poor budgeting or simply by an overlap between jobs. If your credit score is less than satisfactory, it does not mean you cannot qualify for a credit card. There are several options available to those who have had bad credit in the past and for those who are currently trying to repair their credit.
Depending on your specific situation, debt consolidation or use of introductory APRs on balance transfers may be wise choices. If you still need credit or want to start repairing your credit by proof of action, there are several credit cards designed to help rebuild poor credit histories.
Secured credit cardsSecured credit cards require collateral for approval. A security deposit of a predetermined amount is needed in order to secure the credit card, and the security deposit generally needs to be of equal or greater value than the credit amount. Collateral can come in the form of a car, boat, jewelry, stocks or anything else of monetary value. Secured credit cards are for people with either no credit or poor credit who are trying to build or rebuild their credit history. Cards that help rebuild credit often come with low credit lines (such as $250) and additional fees, such as an application fee, may apply. Be sure to read over any terms and conditions for these add-on services before applying. If you use the card responsibly and pay all your bills on time, you can ask for a credit line increase down the road. The extra fees and low credit lines will be worth it if a secured credit card helps you get your overall credit back on track. Compare cards for bad credit. Prepaid credit cards Prepaid cards are not credit cards at all, but are used and accepted just like them. The advantages of prepaid cards is that there are no finance charges and they help you avoid debt since all purchases are paid for beforehand. With these cards you determine the credit line by transferring however much money you'd like to have available to spend to the card. This eliminates the risk of running up credit card debt and makes the budgeting process much easier. Although most prepaid cards do not charge finance fees, other fees may apply, including monthly fees, startup or application fees, over-limit fees, ATM fees, reload fees and more. Be sure to thoroughly look over the terms and conditions for each specific card before applying. Compare prepaid cards. Specialty credit cardsThese types of cards are for consumers with unique needs for their credit use, such as business professionals and students. These credit card programs are designed specifically to meet the needs of those individuals.
Business credit cards These cards are available for business owners and executives and have many of the same features as traditional credit cards: low introductory rates, cash back programs and airline rewards. The difference is these cards come with many additional benefits and perks exclusively for those in the business world.Some of these bonuses include: Business expenses kept separate from personal expenses; special business rewards and savings; expense management reports; additional cards for employees; and higher credit limits.Every credit card is a bit different and promotional offers often change, so be sure to thoroughly look over the terms and conditions for each specific card before applying. Compare business credit cards. Student credit cards Many college students need a credit card, but they generally have little or no credit history, which makes it difficult to get approved for a traditional card. Student credit cards are specifically designed for those enrolled in accredited four-year colleges and universities to help them build a credit history from the ground up. Compared to consumer credit cards, student credit cards are often scaled back somewhat in terms of rewards, features and other benefits, but they can still be a valuable commodity. If used wisely, a student can take the first step towards building a solid credit history with this type of credit card. Once they've proven financial responsibility, it will be much easier to qualify for reward cards and higher credit lines. Compare student credit cards.

Nepal Credit Card and ATM

A credit card is part of a system of payments named after the small plastic card issued to users of the system. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card is different from a charge card, which requires the balance to be paid in full each month. In contrast, credit cards allow the consumers to 'revolve' their balance, at the cost of having interest charged. Most credit cards are issued by local banks or credit unions, and are the same shape and size, as specified by the ISO 7810 standard.

In Nepal Credit Card Bank
Himalyan Bank
Karmachari Sanchaya Kosh Building, Tridevi Marg, Thamel, P.O. Box 20590, Kathmandu, Nepal. Telephones : 4227749, 4250201 Telefax : 977-1-4222800 Telex : 2789 HIBA NP, Swift HIMANPKA Email : himal@hbl.com.np http://www.himalayanbank.com/contents/contents.php?PageID=branch_ho
Board Directors
Mr. Manoj B. ShresthaChairman Mr. Ashraf M. WathraFirst Vice Chairman Mr. Prem P.KhetanSecond Vice Chairman Mr. Prachanda B. ShresthaDirector Mr. Bijay B. ShresthaDirector Dr. Ramesh K. BhattaraiDirector Mr. Amar S. RanaDirector Mr. Upendra Keshari PoudyalProfessional Director Mr. Himalaya S. RanaChief Advisor to the Board Mrs. Ranjana ShresthaAlternative Director Mr. Surendra SilwalAlternative Director Ms. Menuka ShresthaAlternative Director Mr. Gyem Raj AdhikariCompany Secretary

Investment Bank
Nepal Investment Bank Ltd.Durbar Marg, P.O. Box: 3412Kathmandu, NepalTel: (977-1) 4228229, 4242530Fax: (977-1) 4226349, 4228927E-mail: info@nibl.com.npwww.nibl.com.np , www.nibl.com.np

Board Directors
Mr. Prithivi Bahadur Pande Chairman/Chief Executive Director Mr. Prajanya Rajbhandari Director Group "A Mr. Deepak Man Serchan Director Group "A Mr. Krishna Prasad Sharma Director Rastriya Banijya Bank Mr. Rajesh Rajkarnikar Director Rastriya Beema Sansthan Mr. Surendra Bdr. Singh Director Public Shareholder Mr. Damodar Prasad Sharma Pandey Professional Director Under BFIA

Nabil Bank
Head Office Nabil House, Kamaladi, KathmanduP.O. Box: 3729, KathmanduPhone: 4430425, 4429546-47, 4435380-85Telex: 2385 NABIL NP, 2431 NABILH NPFax: 4429548SWIFT: NARBNPKAWeb Address: www.nabilbank.com
Board of Directors
1. Mr. Satyendra Pyara Shrestha Chairman 2. Mr. A.P. Bazgain (Professional) Director 3. Mr. Dayaram Gopal Agrawal Director 4. Mr. Milan Bikram Shah Director 5. Mr. Mohiuddin Ahmed Director 6. Mr. Shambhu Prasad Poudyal Director 7. Mr. Supriya Gupta Director 8. Mr. Tabith Awaal Director

Globel Bank
Contact
Head OfficeBirgunj Branch, AdarshanagarBirgunj - 13, ParsaP.O. Box: 45, NepalTel: 977 051 530337Fax: 977 051 530339 E-mail: info@globalbank.com.npToll Free No: 16600 12 14 http://www.globalbanknepal.com/contact.php
Corporate OfficeKantipath Branch, KathmanduP.O. Box: 19327, NepalTel: 977 1 4231198Fax: 977 1 4231057
Board of Directors:
Mr. Chandra Prasad DhakalMr. Krishna Bahadur Kunwar Mr. Sandeep AgarwalMr. Dhan Bahadur Sherchan Mr. Jeevan Man Joshi -

Standard Chartered Bank
Mr. Sujit Mundul Chief Executive Officer Phone : (977-1) 4783304 Fax: (977-1) 4780314 Mr. Diwakar Poudel Head Corporate Affairs Phone: (977-1) 4782333 Fax: (977-1) 4780762
Standard Chartered Bank Nepal Limited PO Box 3990 Kathmandu, Nepal http://www.standardchartered.com/np/home/aboutus.html

How credit cards work
The length of this article or section may adversely affect readability.Please discuss this issue on the talk page, split the content into subarticles, and keep this page in a summary style. Credit card An example of the front in a typical credit card: Issuing bank logo EMV chip Hologram Credit card number Card brand logo Expiry Date Cardholder's name An example of the reverse side of a typical credit card: Magnetic Stripe Signature Strip Card Security Code Credit cards are issued after an account has been approved by the credit provider, after which cardholders can use it to make purchases at merchants accepting that card.

When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder indicates his/her consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a Personal identification number (PIN). Also, many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet, known as a 'Card/Cardholder Not Present' (CNP) transaction.
Electronic verification systems allow merchants to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. The verification is performed using a credit card payment terminal or Point of Sale (POS) system with a communications link to the merchant's acquiring bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system is in the United Kingdom and Ireland commonly known as Chip and PIN, but is more technically an EMV card.

Other variations of verification systems are used by eCommerce merchants to determine if the user's account is valid and able to accept the charge. These will typically involve the cardholder providing additional information, such as the security code printed on the back of the card, or the address of the cardholder.
Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, any outstanding fees, and the total amount owed. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect (see Fair Credit Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount owed. The credit provider charges interest on the amount owed (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's bank accounts, thus avoiding late payment altogether as long as the cardholder has sufficient funds.

Interest chargesCredit
card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.

For example, if a user had a $1,000 transaction and repaid it in full within this grace period, there would be no interest charged. If, however, even $1.00 of the total amount remained unpaid, interest would be charged on the $1,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. The general calculation formula most financial institutions use to determine the amount of interest to be charged is APR/100 x ADB/365 x number of days revolved. Take the Annual percentage rate (APR) and divide by 100 then multiply to the amount of the average daily balance (ADB) divided by 365 and then take this total and multiply by the total number of days the amount revolved before payment was made on the account. Financial institutions refer to interest charged back to the original time of the transaction and up to the time a payment was made, if not in full, as RRFC or residual retail finance charge. Thus after an amount has revolved and a payment has been made, the user of the card will still receive interest charges on their statement after paying the next statement in full (in fact the statement may only have a charge for interest that collected up until the date the full balance was paid...i.e. when the balance stopped revolving).[1]

The credit card may simply serve as a form of revolving credit, or it may become a complicated financial instrument with multiple balance segments each at a different interest rate, possibly with a single umbrella credit limit, or with separate credit limits applicable to the various balance segments. Usually this compartmentalization is the result of special incentive offers from the issuing bank, to encourage balance transfers from cards of other issuers. In the event that several interest rates apply to various balance segments, payment allocation is generally at the discretion of the issuing bank, and payments will therefore usually be allocated towards the lowest rate balances until paid in full before any money is paid towards higher rate balances. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument, or even if the issuing bank decides to raise its revenue.