All About Credit Cards

Important things you should know about credit cards

The money you spend when you use a credit card is borrowed funds and is not your funds. The amount that you charge is actually borrowed from a bank or financial institution that issues the credit card in an agreement called a revolving credit line. The bank or financial institution gives you access to an agreed maximum amount of money you can use which is called your credit limit. You can charge up to the credit limit they approve you for but it's important to not go over the credit limit. Once you repay the money you have spent you can borrow funds again up to the amount of your credit limit. If you do not pay your balance owed in full when your statement is issued you will be charged interest the next month on the balance remaining.

The funds you charge on your credit card are called principal. You agree for using the principal amount to pay the credit card issuer its principal back plus an agreed upon interest rate also considered finance charge. You only pay the interest or finance charge on any unpaid balance.

For example, if you have a balance of one thousand dollars ($1000.00) on a credit card with an annual interest rate of ten percent (10%) then your monthly interest or finance charge will be ten dollars ($10.00). Every credit card company has to disclose the interest rate it charges you on your carrying balance.

It's best to shop around and find a credit card issuer with the lowest rate if you intend on carrying a monthly balance. It is also important pay your monthly by the due date and not to be late on your monthly payment. If you are late remember that credit cards carry high penalties and the interest rate can jump to a higher possible rate as disclosed in your credit card agreement.

Credit cards allow you make purchases as need or wish knowing you have to repay the funds borrowed. Your credit card will usually have a preset credit limit and a set interest rate or finance charge. But if you pay off the entire balance that you charged each month you will not have to pay any interest or finance charge. We strongly suggest that you pay your balance off every month rather than carrying a balance to avoid these interest or finance charges.

We have provided you a list of credit card issuers with different terms and interest rates. All credit cards issuers have different guideline and criteria for approving consumers to whom they issue their credit cards. If you are in need of a credit card or are looking into obtaining a new credit card with a lower interest rate than the list of credit card providers will be useful to you. You can go to the credit services link to get to the list of Credit Card providers or click on the link below.

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