5 Things You Need to Know About Credit Cards
As people depend on cards over cash these days, you are more likely to see a credit card than any other form of payment, especially in cities. If you want to join in on this, or if you want to add another card to your wallet, do not jump right into it. Credit cards are not toys or free money.
Credit Cards are Loans
That is right. Yes, you are getting money, but in the form of a loan. The lender gives you a certain amount of money to use for whatever you like. Restaurants, toys, bills, and anything else you can imagine. The catch here is that you have to pay it all back. That is the nature of a loan. It is not your money to keep. You can spend it freely, but you have to give the lender back their money when you are done.
If you do not pay the money back quickly enough, you may have fees added on top of the total amount owed. These fees can pile up quickly, especially if you spend a large amount. Before getting the card, know the interest rate on it. Factor this into the total payment if you fail to pay it all back in a timely manner.
Rewards and Benefits
Some cards have rewards and benefits. Cash back, miles, and other advantages are available. Some cards are better than others are, of course, but many of them will have advantages of some time. You also have basic cards that have little or none, with only the money offered. If these rewards are important to you, look into them.
When choosing a card, credit can limit you. A low or non-existent credit score will force you into a high interest, low credit card most likely. Know your credit before applying or use services that help you to find a credit card for your situation.
When you have your card, keep track of it and your credit. There are several points that can help or damage your credit, including the amount of cards that you have and your payment history. For the best credit score stay on top of things.