How Credit Cards Work

A credit card is a card issued by a bank or other financial institution who are referred to as the issuer, to a user or holder. This card is used by the holder by swiping (or with modern microchip, tapping) the card to a Point of Sale (POS) device that has been provided by banks to a merchant. The POS device captures the data of the user and validates with the banks records who then grants the sale. Once this has been completed, the merchant deems the purchase complete. With ease of transacting, the user or the holder no longer needs to pay for the purchase with cash. The banks confirmation is sufficient for the merchant to deem the transaction as paid.

In this case, the bank then credits the users available credit limit and considers the user as a borrower of money to pay for the purchase. The bank will continue to charge interest rates during the time that the credit is outstanding.


The first reconizable credit card was introduced by Bank of America in 1958 as BankAmericard. The success contributed to the licensing to other banks around the United States and eventually around the world. In 1976, all banks licensed with BankAmericard united and eventually formed the now known Visa. During 1966, some group of banks united to form Master Charge to compete with the then known BankAmericard. Master Charge eventually became Mastercard.


The primary benefit that a credit card provides is the ease of transacting. This allows the buyer to purchase goods and services without having to bring cash. This is most convenient for purchases that require large amounts of cash. The buyer no longer needs to issue a check where the merchant needs to wait for their bank to clear it. A credit card transaction that has been approved is cleared soon as the merchant receives slip that the POS prints.

Another benefit that credit cards give is monitoring all your purchases. Charging your purchases to your credit card automatically logs each transaction and can be used by the holder to audit his or her expenditures.

How Credit Card Loans Can Lead To Debt

One of the best practices that has been implemented in the financial world is the introduction of the credit cards. Credit cards are used for payments and have been in practice for more than 50 years. It has simplified the process of transactions and with its growth together with technology, the process of purchasing products and services has been at its best and efficient way.

Another feature credit card offers nowadays is the ability to make a loan over the credit line of the card. A loan is an option of withdrawing cash and charging the cash withdrawal against the available credit limit of the credit card. But be very careful with this one. Having an instant cash loan against a credit card can mean leading oneself into deep debt.

Credit Cards have different interest rates for cash advances. They are often higher than the usual interest rates used when you charge a purchase against your credit limit. Specific rules also apply when paying for the cash advances. If a holder has a habit of rolling over his credit, monthly amortization payments will initially be applied to the cash advance interest, cash advance principal before it is applied to the charges that were made through purchases. This means that your debt for the credit card charges continually increase when you pay the minimum amount due as it only covers the interest of the cash advance made.

Managing Credit Card Debt

It is important that you properly manage your credit card debt. Proper planning and use of the credit card should always be kept in mind to avoid getting deep into debt payments. Credit card loans may often be attractive the way it is presented to us but it will always require us discipline and responsibility in managing them.

Credit card loans should only be availed when necessary and when it has been thought for well enough before making a decision to get one.

Finding the Best Business Loan Offer

When you find yourself in a position of getting a business started or if you’re an entrepreneur with an existing business, you may need some funding to launch or further grow your business. Businesses constantly need funding to survive and grow. Most of the time if a business is operating and earning well, the funding will come from its earnings. But if the business is new or just earning just enough, the owner will need to source the funding from somewhere else.

Funding can come from two ways. The first one is to get investors. Finding someone who is willing to invest a certain amount of money to support the needed funding. If there is only one investor willing to do that, then you are lucky. But if an investor would only like to invest a small amount, then you will need several investors to raise the much needed fund.

The second way to do it is to apply for a business loan that a bank or other financial institution is willing to provide. In this case, you don’t need to share the ownership of the business with other investors. You will have sole propriety over the operations. Unlike getting investors, you will have to consult them on some of the business decision depending on what has been agreed on.

Business Loan Lenders

When getting a business loan, you need to find a licensed money lender singapore whom you are comfortable with. Often times when you are an existing business, the best lender to approach is your bank who knows you and your business well already.

Having a good relationship with the lender is very critical as they will be able to offer you the best loan package because of being a priority and loyal client. You have the advantage of getting the perks that come with being a priority client.

If you are someone who is only starting out a business and don’t have a particular bank that you deal with, make sure you compare lenders. Just like everything else in the world, find the one that you feel comfortable with. Find the product that will help you best in your goals. Find the partner that will help you achieve what you are aiming for with your business loan.

Can A Business Loan Get us Into Debt

Business loan per se is neither good or bad. It is how you manage the loan that creates good outcome or a bad effect to your business or possibly your life as well. Being a form of debt, business loan requires proper management and proper handling for the borrower to avoid the traps of getting into the struggle of paying of the loan.

It is with great emphasis that we share how business loans work and how it can be managed to your advantage. Knowing what business loan is and what it can do will definitely help taking advantage of the debt instrument to further provide a leverage in operating your business.

Business Loans

This type of loan is a secured loan where the lender can require a collateral in the form of a property or an ownership over your business. When a business loan is granted to a borrower, the bank or financial institution will put a lien over the property which will allow the bank or financial institution to sell the property when there is default in paying off the loan. The proceeds of the sale will be used to pay off the debt and any interest and finance charges that are generated because of default.

Lenders may also have part ownership over the business if a collateral is not the option used to secure the loan. In this case, when in default, the lender will have control over the earnings of the business which it will use to pay off the loan upon default. In worse cases where the business is pushed to close down, the lender will have priority over the business’ assets for collection purposes.


We all know that business loans can be used to put up a business. But for existing and operating businesses, a business loan can do more. It can be used for growing your business by acquiring equipment, purchasing inventory, or even used to expand to other locations. A lot can be done with business loans. Having a good plan and goal will help put the loan into good use.

Be Cautious of Loan Aggregators

Payday loans are one of the most popular types of modes of lending because of the ease of processing and approval. Being a very lucrative business, payday loans are one of the fastest growing businesses that in the financial industry. And one of the problems of a fast-growing industry are people who take advantage of the demand.

We cannot deny that there are a lot of fraudulent acts that happen within the financial industry. One of these acts is done through a loan aggregator which operates under the umbrella of payday loan sg. A loan aggregator is someone who collects data and connects the borrower to a lender for small cut on the income generated from the interests earned by the lender. The problem with this set up is that the personal information that a borrower provides is passed on to the lender via the loan aggregator who collects the information. They are effectively middlemen between the lender and the borrower.

A lot of fraudulent cases have risen from loan aggregators. One of the most common incident is identity theft. Because loan aggregators collect the personal information that a certain borrower provides, this personal information are then being sold to third parties for a hefty amount. Unfortunately for some, the personal information lands on the hands of buyers who use it for illegal purposes.

Now, it is very critical that we avoid loan aggregators as some intentionally use it as a front to steal personal information or data of the borrower to be sold to third party users. Buying other people’s personal information is another lucrative business where it can feed of from other lucrative businesses. A good example is the payday loan. There are certain people who prefer to go through the process of applying online to avoid the feeling of shame for getting a payday loan or a personal loan from the best personal loan singapore. Little does a borrower know, he would start entering his data under a loan aggregator’s website which captures the information soon as it is type. This is done through a software known as a keylogger. Regardless if the borrower hits the submit button or not, the information is already captured.

This is one reason why it is very critical to ensure that when dealing with lenders for a payday loan, make sure to deal with direct lenders only.