Credit Cards-Master Cards

MasterCard is one of the most accepted methods of payment issued worldwide. MasterCard has over 20,000 organizations who are members and is used by customers in over 210 countries. In excess of fifteen million transactions in over 180 currencies are processed in a single day using MasterCard.  There are many different issuers and banks which offer MasterCard as a way to send or receive payments both online and offline. The typical fees for a MasterCard can range from no annual fees in the first year to approximately $95 per annum. Most of the conditions attached to a MasterCard are redeemable only with excellent credit.

MasterCard comes both in debit or credit cards, with a debit card it is based solely on the use of your own funds, while on the credit card it is with the bank’s funds. MasterCard offers many different attractive benefits and rewards if it is used with responsibility. These benefits include fraud liability, which kicks in if or when your card gets lost or stolen. Travel emergency advance, which is just as the name suggests. In the event that you are unable to use your card while traveling for any reason, you are able to get an advance, and sort it out when you return.

These cards offer travel and accident insurance, Cash back, bonuses, cash rewards and you are able to apply for a MasterCard with no application fees whatsoever. It is better for you if your balance is paid in full each month it becomes due, as you can use the MasterCard to re-establish, build or rebuild your credit if the full amount is paid in a timely manner each month. It is also beneficial to you f you try to maintain your credit balance on the card below the minimum limit. When you close your account with a nil balance you are refunded your security deposit, if you had one. This is not the same with all issuers, and conditions may vary with each.

Buying on Credit

In a world that is heavily reliant on economics and personal finance on a global scale, it is necessary for people to have the availability of credit. Both individuals and businesses use credit to facilitate purchases that they would not have been able to afford in cash. Having access to credit can be either an advantage or a disadvantage, depending on whose perspective you look at it from. The ease that is currently experienced with accessing credit is proof that it is a necessary tool for people to be able to progress in life. According to the definition given by the Webster’s dictionary, credit is transferring goods and services in confidence. with an agreement to pay at a later date.

 Credit transactions began in colonial times. when it was only the privileged people who were able to access credit. Farmers were the main ones who needed credit on a regular basis to help with their livestock. There were no charges for accessing credit in those times, instead, the cost was directly added to the price of the loan products (Omar et al.). Consumers who make credit, and not cash purchases are major players in the economy. The ease of accessing credit also comes with the responsibility of being able to repay it on time and in full. Many people are able to access credit, but not all are able to repay their debt when it falls due. To this end, many are indebted to the lending institutions that afforded them the privilege of accessing the loan. Even the government has loans and if they are not paid, will also run into problems.

The interest on a loan is the major contender in the problems that are faced by borrowers. Many believe that after they have accessed credit, the prompt that they receive to repay the minimum balance is the only payment that they need to make. When the minimum balance is repaid, the interest continues to grow on the principal until it is also repaid. The public, government agencies, individuals and corporations are all users of credit (Roberts and Jones). In the world today, it is one of the most important methods used to facilitate growth. Credit, when it is properly used, gives us buying power for the items that are not easily afforded. Even though many abuse this finance option and end up in the “red”, not everyone will be as careless with their credit. If credit is managed properly, the ability to access it can grow and enable the people who access it to see amazing growth in their lives.

With the credit reporting requirements that have been in place in the US since the fifties, it has prompted the creation of global models for other countries who wish to do the same. It was reported that if credit is not used, or made available in an the economy, then that economy will not experience the amount of growth that countries who do the opposite experience. Many countries have not yet realized the benefits of having a healthy credit relationship with others. The credit history reporting mechanisms that are available to institutions that provide loans vary, according to the type of loan, the amount and the borrower’s repayment history (Cole). With these considerations in mind, one should not have a problem getting their credit approved.

Before the practices that are currently in place regarding loans, the information that was made available on a borrower’s delinquency rate, bankruptcy, etc., were the driving force behind credit approval or disapproval. This has changed drastically, as borrowers who pay on time and in full are now that force. If data is to be further translated, the countries that reported their negative credit history and caused the issuing of credit to be restricted, are now facing lower growth rates than the ones who give credit. The repayment history of borrowers, added to the responsible handling of their credit have increased the availability of credit to those people. They have seen major growth in their credit rating and have been able to access lines of credit that they would not have been able to access before.

When assessing their risks, companies use these individuals who are prompt payers, to do so. One of the benefits to be derived from paying up, is the increase of loans that are disbursed to socio-economic groups of people who would have problems accessing these loans otherwise (Roberts and Jones). It has also made different types of loans available to people of varying income levels and a reduction in the losses that would have been incurred because of bad debts. Companies have seen a reduction in their losses from loans disbursed because of their investigation and reporting capabilities. For an individual to get access to mortgages, cars, vacations, furniture, education and even weddings nowadays, they have to be able to access and repay credit that is extended to them.

Because of the rate at which credit is accessed on a daily basis, financial institutions have now diversified their portfolios to include loan products that have resulted in major profits. This has resulted in the increasing of credit that is owed for mortgage to 4.1 trillion as at December 1998 in lines of credit for home equity. Consumer credit such as personal loans, car loans and other types of individual loans were a whopping 1.33 trillion. By the ending of 2003 this figure went up to 9.3 trillion, combined with mortgage credit (Mann). Without this type of lending, institutions would not be able to realize a profit from the interest that is repaid with these loans.

Corporations that have experienced losses because of loans cover their risks by insuring those loans. If credit was not a major player in the economy, then these figures would have been significantly lower than they currently are. Many individuals are averse to taking loans and feel that they would rather use cash. In addition to the growth that can be experienced by accessing loans, it also allows the retention of funds that are saved by that individual. Another consideration is the spate of robberies that now plague the US. With access to credit, it eliminates the need for transporting large sums of cash. For almost forty years, the US Government has encouraged players in the credit industry to give their customers access to credit. They created public policies that have seen drastic increases in the credit that is available in the various sectors of the economy, including those who fall in the lower echelons of society.

In universities and colleges today, approximately 70 percent of the student population are enrolled because of their ability to access credit. In 1956 there were 29.7 million people who accessed credit and purchased their homes, in comparison, there were 75 million in 1998 (Cole). Based on data from the Federal Reserves website, the assets of financial corporations, which are bank credits, securities, leases, mortgages etc., grew from -6.0 billion in 2009 to 4 billion in 2014. If these figures are not proof of growth in the economy, then what is? Even further growth is estimated in the economy because of the availability of credit. With the increase of credit that is made available to individuals and corporations per capita, the cost to access these loans will also be increased.

If the reverse if true, then it can drastically impair a country’s growth. If one has the ability to avoid overspending or going above their credit limit, then the possibilities can be endless for their credit access potential. If it is used in a responsible way, credit can be a necessary and valuable tool that will allow businesses, countries and individuals to grow and improve themselves. It would be wise for intelligence, discipline and budgeting wisely. to play a big role in accessing credit. By evaluating one’s status, debt and expected income, the cost, and by keeping in mind the consequences to be faced by going over your limit, that person can be successful at monitoring their use of credit. Credit availability and globalization allows a country to grow and be successful.

It takes the effort of not just businesses, but also people, for a country to realize profits from extensive credit use. Choosing to buy on credit is an individual choice, which should be made responsibly. With greater responsibility comes increased access. If one handles their disbursement and use of credit wisely, then they will have access to even more credit. This can lead to a better quality of life, education and prospects for that individual. If credit is not accessed, on the other hand, then growth and prosperity is significantly lower for that individual. To sum it all up, it makes a lot of sense economically to buy things on credit.

Doing this will not only enable an individual to achieve what they want to in life, but will also allow them to keep their savings for an emergency. Waiting to save for what you want can result in you paying a higher price for the item. You can forget about all of the negative comments about buying things on credit, as most of the people who try to discourage them will have bought an item on credit even once in their life. There are negatives and positives in everything that we do, but buying on credit is a positive step.