What is a Credit Card?

How many times have you walked into a department store, gone to pay for something and forgot your cash? Well that’s where a credit card comes in handy. For those times that you need a tow truck, and do not have any money handy, use the plastic.

Types of credit cards?

There are three basic kinds of credit cards offered today, those offered by banks, those offered directly by companies, and department store cards. The credit cards offered through banks are usually Visa or MasterCard, these cards are private memberships. These cards are highly recommended because they have what is called a “revolving” credit, where you pay some of your bill every month, but never the full bill amount. This is heavily recommended because it looks better on your credit in the long run. The credit cards offered by companies, like American Express and Diners Clubs. The bad side to these cards is the bill is due in full every month, but the good side is there usually is no penalties for up to two months if the payment is late. Department store credit cards are usually purchased with a store chain, and need your bank account information in order to validate you. Some of these stores offer the revolving payment, while others want the full payment every month, and will sometimes stop the usage of your card until you do pay the full bill.

What can I use a credit card for?

There’s a limitless amount of things a credit card can be used for. Depending on the credit card type, there may be specific perks. Travelers’ miles may be a reward for using the card, while you may get a better status like “gold” or “platinum” for using the card so much as well. Some credit cards will also double the points earned for every dollar you spend, so if you are on a credit card that gives vacation rewards, you earn the points faster. Most credit cards are accepted anywhere, and it is usually posted somewhere near a register what credit cards are accepted if you have any questions.

Will it ever come back to haunt me?

Many people will advise against getting a credit card, and with good reason. Back when credit cards were new, tons of people decided to get them, max them out and never pay the bill. They thought nothing would ever happen because of it, well they were wrong. Not paying a credit card bill looks horrible on your credit score, and credit record, not to mention if the amount is large the credit card company may take you to court in order to receive their payment. Now if you are wise then you can easily use a credit card for it’s intended purpose and not go whacko with it. Credit Cards are a great way to up your credit, as long as you keep the bill under control.

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