What Is Credit Card And How To Use it?
What is Credit card?
If you want to know what is credit card? So read this article till the last. After reading this, you will know what is credit card and how to use a credit card?
A credit card is a plastic card issued by financial institutions, which allows you to borrow money from the pre-approved limit to pay for your purchase.
Its limit is made by the card-issuing company based on your income and your credit history. Often we can take more limits with higher credit score with better history.
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You can use a credit card to do online shopping or suddenly when you need money. When you withdraw money from your credit card, it has a limit time, by that time you have to pay the entire money.
If you are not able to pay that money by the time given by the company, then the company can impose a penalty on you.
Your credit card details are always secured with the company that issued the card. To avoid any fraud, you should never share your credit card details with anyone.
How to use a credit card?
Credit cards are different types and the methods to use them also vary. But I am going to tell you some ways that you can know how to use a credit card. This method is applicable in almost all types of credit cards.
Whenever you withdraw money from your credit card for some reason, you are not charged any interest on that money for about 50 days. If you make expensive purchases at the beginning of the billing period, you can avail the entire grace period.
If you have more than one credit card, then you should use it. For example, if you have a Fuel Credit Card, you can take advantage of Fuel Surcharge waiver from it and you can earn Reward Points.
But if you have a travel credit card, you can book a flight ticket or hotel etc, with it. By using the wrong credit card, you get fewer reward points, which will reduce your credit score significantly.
If some household members suddenly become ill or suddenly we need a lot of money from any reason, then you should opt for a personal loan. In this, you do not feel any interest until 90 days.
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You get 2 times more reward points by online shopping, Which increases your credit score. If you want to increase your credit score then you should do more and more online shopping.
Difference between a credit card and a debit card?
Debit cards and credit cards help you pay for online transactions even in the absence of cash in your wallet. But there are some important differences between the two.
The main difference between a credit card and a debit card is the way money is deducted when making payments or purchases.
What is Debit Card?
A debit card is offered by the bank for your savings and current account. You can use it to spend the amount that is already in your account.
If you do not have money in your account, then you cannot withdraw money from your bank with a debit card.
What is Credit Cards :
On the other hand, with credit cards, you can withdraw money from the bank as per your requirement.
Even if there is no money in your account, you can withdraw money from a credit card.
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You have to repay the borrowed amount within the stipulated time limit, after which the card limit is again increased.
If for some reason, you are not able to give the money within the stipulated time, then interest starts on the outstanding money.
The credit limit depends on many things like your credit score, age, income etc. In case of delay in payment, only the outstanding amount is charged.
You can also avail full reward points, cashback and discounts on movie tickets, online shopping, travel booking and many more.