Understanding the fundamentals of credit card, how it functions, what are the advantages and disadvantages of using, the legalities of the usage, the interest rate to be charged , the credit limit etc. helps you decide if it suit your purpose or not.
Every flap of your wallet contains this powerful piece of plastic of different colors with different credit limits. It is as good as money to pay for goods and services for which the user pays on credit. So do always make a bold consciousness in your mind that you have to pay back, that too with interest exceeding the stipulated limit period.
Plan your purchase
Whenever you make a purchase, plan in advance if you are paying it through your credit card. Borrow the minimum and pay as quickly as possible is the mantra to sustain to avoid a financial burden. Buy it if you can afford it to pay for the purchase in that fixed time of your credit limit.
Make a point to purchase the items with your credit card that you ordinarily would have purchased for your daily needs if you don’t have hard cash at that particular period of time and you have no other alternatives but to purchase that goods or services. Be sure enough that your paycheck is scheduled to get credited to your account the next day or you get hold of your stuck-up money. Credit card transaction is good borrowing money for a short period of time.
Credit cards differ in purpose
A general card or with your unsecured credit limit in lieu of your credit history can be used wherever you want to utilize the services. There are also private label cards that are specified to a particular store or service station. Secured credit cards are also issued as an add-on backed by the funds like a Fixed Deposit with your bank. First of all you have to understand why do you need a Credit?
So how does a credit card work?
How does a credit card branch of a bank do business? You always may have marveled. These offshoots are a two way service provider, on one side the merchants where you chance to swipe your cards and the other the card holders. Whenever you swipe money changes hands. The merchants pay fees which in turn in revenue for the card-issuing bank. On the other hand, as soon as you swipe your credit card the purchase is added to your credit account. The banks couriers you the bill at the close of each month. For the bank its more advantage if you don’t pay your credit bills on time. The interest mounts up, is more lucrative as the bank profit is concerned.
Credit Card interest rates do matter a lot
Be fully aware of your credit card interest rates before applying or acquiring or using that particular cards feature. Credit card is a financial tools where there is a tendency to be fooled. So be well prepared , and know your facts.