Credit cards – simple guide through credit cards, find out how they works with us!

In todays world we are more commonly using creadit cards, they feels way more comfortable now rather than carry all of this money in our packets. Here we are about give you a simple guide though credit cards, to make use of them way more easier for you.

What credit card is?

At the beggining let’s start with a simple explanation of credit cards. Credit card is in fact a plasic (sometimes metal) cards which are used to pay for shopping or different kind of services. It is just some kind of facility which is provided by banks which simply borrows funds within earlier approved credit limit.

How credit cards work?

Now as you know what these credit cards are, you should also know how they really works. These cards can be used in super markets or even to pay your bills, no matter what you are using it for, the card details are being sent to the merchant’s bank. After that the bank gets authorization from a credit network to process the transaction. Then when transaction is being approved the payment is made to the merchant and your card available credit is reduced by the transaction amount.

What should you know about credit cards?

Now you know what these cards are and also how they works, however there are couple of other things you may think are going to be useful. In fact here are some really important points you should be aware of.

You should be aware of this that you shall do at least minimum payment every month. You can pay your bill in many ways, which will be explained on your bill. If you feel like you may forget about it you can set up a Direct Debit. This will save you from unwanted charges, you should be aware of this that late or missing payments may cause damage credit rating of yours.

Another thing you should know is this that these cards aren’t right for cash withdrawals because of fees. That is why if you withdraw cash on this credit card. Usually you will be charged a fee and interest which will be at higher rate daily from the day you take your cash.

One more thing you should know about credit card is this that you have to be at least 18 to apply for this kind of credit card, but with some of them you have to be at least age of 21.

Types of credit cards

You should know that there are several types of credit cards. That is right, there isn’t only one type of credit card, and here we are about to list them for you:

• co-branded credit cards,
• travel credit cards,
• cash back credit cards,
• starter credit cards,
• business credit cards,
• rewards cards.

There are many types of credit cards as you can see, they are ones of the best choices for different types of occassions.

Pros and cons of credit card

As you already probably know there are good and bad side of almost everything in this world, and the same is when it comes to credit cards. Let’s start this list of pros and cons with somethig good, which is:

• you can earn some rewards like for example cash back,
• you can get credit score information for free,
• it has increased purchasing power,
• it is not linked to checking or to your saving account,
• there is no foreign transaction fees,
• there is protection against the credit card fraud.

Now as you are aware of some pros, you should also know its cons to know all about them. That is why we are going to list them as well for you:

• this can damage your credit score,
• it has high-interest payments,
• you can may pay high fees,
• it is expensive to be used abroad,
• it can get you into the spiral debt.

Conclusion

Now you know all about credit cards, you may now decide it this type of card is a good choice for you. We hope there is nothing that can hide from you now. You are now ready to start your story with credit cards in a safe way!