Credit, Debit, and Charge Cards

ou can use a credit card to buy things and pay for them over time. But remember, buying with credit is a loan — you have to pay the money back. And some issuers charge an annual fee for their cards. Some credit card issuers also provide “courtesy” checks to their customers. You can use these checks in place of your card, but they’re not a gift — they’re also a loan that you must pay back. And if you don’t pay your bill on time or in full when it’s  due, you will owe a finance charge — the dollar amount you pay to use credit. The finance charge depends in part on your outstanding balance and the annual percentage rate (APR).

Charge card — If you use a charge card, you must pay the balance in full each time you get your statement.

Debit card — This card allows you to make purchases in real-time by accessing the money in your checking or savings account electronically.

The Fine Print

When applying for credit cards, it’s important to shop around. Fees, interest rates, finance charges, and benefits can vary greatly. And, in some cases, credit cards might seem like great deals until you read the fine print and disclosures. When you’re trying to find the credit card that’s right for you, look at the:

Annual percentage rate (APR) — The APR is a measure of the cost of credit, expressed as a yearly interest rate. It must be disclosed before your account can be activated, and it must appear on your account statements. The card issuer also must disclose the “periodic rate” — the rate applied to your outstanding balance to figure the finance charge for each billing period. 

Some credit card plans allow the issuer to change your APR when interest rates or other economic indicators — called indexes — change. Because the rate change is linked to the index’s performance, these plans are called “variable rate” programs. Rate changes raise or lower the finance charge on your account. If you’re considering a variable rate card, the issuer also must tell you that the rate may change and how the rate is determined.

Before you become obligated on the account, you also must receive information about any limits on how much and how often your rate may change.

Grace period — The grace period is the number of days you have to pay your bill in full without triggering a finance charge. For example, the credit card company may say that you have 25 days from the statement date, provided you paid your previous balance in full by the due date. The statement date is on the bill.

The grace period usually applies only to new purchases. Most credit cards do not give a grace period for cash advances and balance transfers. Instead, interest charges start right away. If your card includes a grace period, the issuer must mail your bill at least 14 days before the due date so you’ll have enough time to pay.

Annual fees — Many issuers charge annual membership or participation fees.Some card issuers assess the fee in monthly installments.

Transaction fees and other charges — Some issuers charge a fee if you use the card to get a cash advance, make a late payment, or exceed your credit limit. Some charge a monthly fee if you use the card — or if you don't.

Customer service — Customer service is something most people don’t consider, or appreciate, until there’s a problem. Look for a 24-hour toll-free telephone number.

Unauthorized charges — If your card is used without your permission, you can be held responsible for up to $50 per card. If you report the loss before the card is used, you can’t be held responsible for any unauthorized charges. To minimize your liability, report the loss as soon as possible. Some issuers have 24-hour toll-free telephone numbers to accept emergency information. It’s a good idea to follow-up with a letter to the issuer — include your account number, the date you noticed your card missing, and the date you reported the loss.Keep a record — in a safe place separate from your cards — of your account numbers, expiration dates, and the telephone numbers of each card issuer so you can report a loss quickly.

Study shows people tend to drive cars that resemble their own faces

People tend to buy cars whose grilles and headlights resemble their own faces, according to a new study by two Austrian researchers.

Many studies have been done to show that people see cars' fronts like human faces and assign them personalities based on these "faces." However, a new study by psychologists Stefan Stiegar and Martin Voracek of the University of Vienna takes things a step further and says that people also tend to buy cars that look like they do.

The study, titled "Not only dogs resemble their owners, cars do, too" and printed in the Swiss Journal of Psychology, was built around black-and-white photos of 30 people and their cars. The researchers made sure only to use cars that the owners had somehow selected themselves, rather than cars received as gifts, prizes or through inheritance.

"The average person can detect a physical similarity in the 'faces' of cars and their owners," summed up research psychologist Jesse Bering in his evaluation of the study.

The authors of the study controlled for the possibility that participants were working off of gender or status stereotypes by conducting the same test using photos of the car from the rear or side, as well as the front. Their findings showed that a participants' odds of choosing correctly were better-than-chance only when the image set included the cars' grilles.

Stiegar and Voracek tried one final test, too, based on the results of a recent study that showed people can match owners to their dogs. They showed participants image sets with a car and six dogs, and asked them to rank each dog "on the likelihood of its master being the owner of the car shown."

When the image set included the car's grille, again the odds were way better than chance. "Implied in these results is the startling fact most car owners are unwittingly purchasing cars that look like them," explains Bering. "To top it off, our dogs’ mug shots apparently bear an objective similarity to our cars’ 'faces' as well."

The study is the latest in a series that shows we tend to subconsciously treat their cars like people, and not just because we give them names and sometimes pamper them. In 2012, research showed car enthusiasts use the same part of the brain to remember cars' looks as they do human faces.