What is a Credit Card?

A credit card allows you to buy things even though you might not have the money to pay for it right away. The company that gave you the card lets you spend up to an agreed sum and then makes additional money available to you as you pay off what you've spent. You must pay at least a minimum amount by the due date, generally once every month. You will pay a finance charge or interest on any amount you do not pay by the due date.

Today our entire financial system relies on credit. Credit cards can help to make your life that little bit easier- you can use it to pay for goods or services, either over the phone, online or over the counter.

Credit cards can enable you to have that little extra spending power when and where you need it. In addition to paying for purchases you can also use your credit cards in order to withdraw cash from a cash machine, not only in this country but all over the world.

It is increasingly difficult to operate in the modern economy without a credit card. Credit cards allow people to manage emergencies, to shop conveniently in the High Street, by telephone or over the internet and are useful when travelling abroad.

With each credit card you will have a limit to the amount of money that you can spend on it. This is known as a 'credit limit'. You can withdraw money and pay for goods and services as much as you want up to your credit limit, effectively borrowing capital from your credit card provider.

Every month you will receive a credit card statement that will detail both your balance (the amount of money you have either withdrawn or spent) and any interest that has accrued upon it. You can then either pay off the full amount or make the minimum payment.

A credit card allows the cardholder to borrow as much money (up to their credit limit) as they like, when and where they like, without having to get permission from their bank manager.

All credit cards have finance charges for not paying your balance in full each month, but you could save a lot of money by shopping around for the credit card that offers you the best terms.

Shop for a card with an interest free period that gives you enough time to pay your bills on time without charging you interest. Credit cards with no interest free period start charging you fees as soon as you buy something on your credit card.

A credit card is convenient for making purchases. It is also the best way to create a credit history for you, and this is necessary to do things like buy a home.

It is very easy to lose control of your spending habits if you rely on credit cards too often. While they can be very useful, credit cards can also be risky. Even people who are usually good with their money get into trouble with credit cards. The problem is that people use their credit cards too often and let their debt add up. Then they can only pay back small amounts at a time. This ends up costing a lot of money in finance charges.

Before applying for a credit card, you should decide why you want one, and make sure you can use it wisely.

You may freely reprint this article provided the author's biography remains intact:

About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

In The News:

pen paper and inkwell


cat break through


Manage Your Credit Wisely

Getting your first credit card is a big deal and... Read More

Get Your Credit Score To Soar In The Twinkling of An Eye

Ever wonder how a creditor decides whether to grant you... Read More

Collection Agency Secrets for Collecting on Bad Debt

Getting worried that one of your clients, customers or patients... Read More

Credit Cards - The Basics

How Lenders Operate ? And How They'll Make a Tidy... Read More

What Is the Fair Credit Reporting Act and What You Should Know About It

The Fair Credit Reporting Act (FCRA) and the recent update... Read More

Different Ways to Borrow Money

There are many different ways to borrow money. Outlined below... Read More

How Do I Establish A Good Line of Credit?

A line of credit, roughly defined, is the amount of... Read More

Reward Credit Cards: Get the Best Rewards Card Incentive Program

A good credit reward card can contribute to your retirement... Read More

Fixing A Credit Report

Fixing a credit report starts with seeing what's on it.... Read More

Rebuild Your Credit the Right Way the First Time

If you are one of the millions of people out... Read More

Maximizing Credit Card Rewards

We spend money every single day on many different types... Read More

The Hitchhiker?s Guide To Insanity

A new sickness is plaguing the UK called Denial. Denial... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

Credit Help For Renters And Others On The Horizon

Sue is a homeowner and pays her mortgage and other... Read More

Is it Safe to Use Online Car Finance?

Online car finance is convenient. You can apply over the... Read More

How To Repair Your Credit Report

A credit report is run on a buyer when he... Read More

ChexSystems: Alternative Options for People Whove Been Checking Accounts

Individual banks elect to become members of ChexSystems, and to... Read More

Credit Cards - A Blessing or a Curse?

Owning a credit card can be quite an advantage. Whether... Read More

Collection Agencies: What Do They Do?

Collection agencies are businesses that collect past-due bills and accounts... Read More

Five Debt Negotiation Facts

These five debt negotiation facts along with a few debt... Read More

How did a Thief get my Name? Don?t be a Victim of Identity Theft

How do these people get my name? If you have... Read More

How to Get Credit Reporting Agencies to Help You

The process of clearing credit can be laborious and frustrating.... Read More

All You Wanted to Know of Bad Credit

Martin Henderson is in a fix these days. Because of... Read More

Can You Acquire Good Credit Overnight? You Bet

Your credit file may not reflect all your credit accounts.... Read More

Bad Credit Loans For Those Who Seek Alternatives for New or Old Car

You can still save money on a Bad Credit Loan... Read More

The Advantages of Credit Cards

There are many evils associated with credit cards, but there... Read More

Which Credit Card?

Bewildered by the sheer variety of debit cards and credit... Read More

What Does Your Credit Say About You?

A credit report is more than just a snapshot of... Read More

Some Truth About Credit

Credit is currently and has been historically an integral component... Read More

Automobile Credit Report

When applying for a loan to purchase a car, the... Read More

Establishing Credit ? What You Need To Know Part 1

Establishing credit is one of the most important things you... Read More

Two Things You Need To Know About Prepaid Debit Cards

According to the September 2004 issue of the Nilson Report,... Read More

UPS Delivers the Goods, Your Identity

Well now we add CitiGroup and UPS to the Identity... Read More