Lucas Herman Isela Prado
Sociology 101 -220
Dr.Reginald F. Sey
What to do and what not to do with a credit card
What is a credit card? How does a credit card affect me? Those are some of the topics that everyone that is looking to start up a credit card program. A credit card is a payment card issued to users as a system of payment. Scholars of how stuff works describe a credit card like “It allows the cardholder to pay for goods and services based on the holder's promise to pay for them”. The issuer of the card creates a revolving account and grants a line of credit to the consumer from which the user can borrow money for payment to a merchant or as a cash advance to the user. A credit card has annual fees that you must pay each and every month. Basically a credit card has two types of payment. These two types of payment are over time where you only pay the minimum amount per bill. Or you can pay the full amount before the bill is due. If you do not pay this within the certain amount of time that they allow you will receive a late penalty. What the numbers mean on the front of the card is the system number, bank number, account number, and then the check digit. The first digit of the credit card is called the system number. It means that the card is a Visa Card, MasterCard, and Discover Card. The cards that I mentioned are the type of credit cards that are available to the public. The bank number of the card only identifies the card, which is then electronically associated by the issuing organization with one of the options is a bank account. The account number on a credit card is eight digits long. This identifies your bank account and that you are the main holder. The stripe on the back of a credit card is a magnetic stripe, often called a magistrate. The magistrate is made up of tiny iron-based magnetic particles in a plastic-like film. Each particle is really a tiny bar magnet about 20 millionths of an inch long. The stripe can be written because the tiny bar can be magnetized in either the north or South Pole direction. If you feel the black stripe on the back of the card it could feel like a cassette tape. There are three tracks on the black stripe. Each track in less than one tenth of an inch wide. The first track is two hundred and ten bits per inch. The second track is seventy five bits per inch. And for the third it is exactly like the first track with two hundred and ten bits per inch. There are two types of cards that can hold money one is a credit card and the other one is a debit card. A credit card has money that you do not have in your bank account yet and the debit card is the money that you have and are able to spend right away. If you apply for a credit card the business will have insurance plans just in case your card gets stolen and the person who stole your credit card makes payments on the card without your knowledge. Apr stands for Annual Percentage Rate for credit cards. The annual rate that is charged for borrowing that is expressed as a single percentage number that represents the actual yearly cost of funds over the length of the loan. It includes any fees or additional costs associated with the bill. With the credit card percent it is times per month 12 months’ times by whatever your percent is for that credit card business company.
It seems that now days everyone has accessibility to a credit card. However the question is do they know the pros or cons to having a credit card. Not many people understand the real concept of a credit card, especially young college students. There are several reasons why people should own a credit card, but if the person does own a credit card they should know the disadvantages of having one. Owning a credit card can help people in case of emergencies. When one doesn’t have access to money a credit card can help with unexpected healthcare cost, job loss, or auto repair. Credit