The word "credit" is a Latin-based word meaning "trust". The concept of credit has been around for over 3,000 years, but it wasn't until 1730, when furniture was offered through weekly payments, that it was available to the consumer in modern society. Two hundred years later, in 1930, the slogan "buy now, pay later" attracted the attention of both consumers and corporate America.

Next, throughout the 1950s, credit cards were issued to a variety of people who could charge their meals at participating restaurants throughout New York. Soon enough, credit cards came equipped with a magnetic stripe that allowed consumers to charge products to their banking accounts.

Today, there are over 190 million credit card holders throughout the United States, and 81% of households have at least one credit card. This technological innovation has changed the way people spend their money. There are four basic types of credit cards, each with its own positives and negatives.

Bankcards. The most common form of credit card, a revolving loan usually denoted by the licensor Visa or Mastercard. The licensors, such as Visa or Mastercard, allow banks and finance companies to extend credit to anyone in the world, yet still receive payment. Bankcards are more often than not unsecured, however, those with low or no credit may have to back their credit card with physical property, or collateral.

Seller / store cards. Most larger merchants and oil companies will offer this type of credit to a consumer, which is basically an unsecured, revolving credit card that can be used only at the merchant or oil company. JCPenney, Sears, and Exxon Mobil are all popular companies which offer this type of card, which will not usually have a fee but may carry a very high interest rate.

Travel / entertainment cards. Similar to bankcards, however the balance must be paid off in full every month. American Express has long been the leader in this field, however others such as Diner's Club have appeared over the years. These cards are usually more difficult to obtain, as the maximums are usually higher and the borrower must be able to pay the entire balance off every month.

Debt / ATM cards. These cards look similar to credit cards and can be used the same way. However, any purchases made are immediately deducted from the individual's checking account. For the individual looking to stay within his / her means, this is the card, as you are unable to spend more than you have.

Given all these conveniences of the modern credit card, many consumers quickly find themselves in over their head when it comes to personal credit card debt. This is where Debt Free, LLC can help - assisting you in creating a plan to get out from under your personal debt load - without damaging your credit in any way. Click below to obtain a free consultation today!

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