A Credit Card Primer

A credit card is simply a plastic payment card issued by a bank to authorized users to enable the user to pay to a merchant for certain goods and services depending on the cardholders’ accrued credit. The credit limit of the credit card may be increased or decreased with the permission of the card holder. This card has a magnetic strip on its back which holds the monetary amount. The cardholder is granted permission to use this plastic card for transactions at specific places only such as hotels, gas stations and other licensed businesses where credit and debit cards are widely used.

As far as the debit cards are concerned, they are the less commonly known of the two. Debit cards have no credit limit and can only be used in specified places and for specific amounts of money. It is practically impossible to overspend with a debit card because once the balance reaches the credit limit, that particular transaction will be charged and a note will be left on the customer’s account for future reference. This also applies to an account in which the user has already reached his or her credit limit. If a debit card is used to make a purchase, the money will automatically be withdrawn from the customer’s account as soon as the purchase is made.

A major disadvantage of these cards is that if they are misused, they will have a negative impact on the credit cardholders’ credit history. They may be able to get cash advances when needed. The banks in which these cards are issued will not provide the customers with any grace period when it comes to their overdraft facility. There is also a possibility that the cardholders will face legal issues for using these cards for purposes other than for shopping or traveling. Cash advances are not allowed for purchases made under the name of a dead person or a person suffering from bankruptcy.

Credit Cards Pays Back: If cardholders cannot pay for their purchases straight away, they may choose to make cash advances which are subject to a high interest rate and high transaction fees. Credit Cards Pays For Fall Out: In many cases, cardholders fail to make their payments due to the fact that they do not always have the money in their account. When cardholders cannot afford to pay their balances right away, they often take out more loans, which further increase their debts. Credit Cards Pays For Summer Breaks: Cardholders usually take summer breaks and holidays to their favorite beach resorts. If these cardholders fail to pay their balance transfers off at the end of the summer break, they will be faced with high costs once again.

It is important to remember that most major retailers in the UK now offer their customers the option of making purchases using their debit card. This gives cardholders a greater control over their expenses. Credit cards are still a useful financial tool, especially for those who can show that they make regular purchases regularly. They can also be helpful in situations where a client cannot meet his or her monthly credit card expenditure requirements. However, as with all financial tools, credit cards should be used wisely and only for purchases that are needed and repayments that are affordable.

Credit cards provide a variety of options for consumers who want to better manage their finances. Credit cards can help you make purchases when you don’t have enough cash on hand, or you can also arrange for payment plans that work for you. Credit cards can also help you plan your finances and ensure that you pay off your debts in a timely manner. By carefully choosing which credit card to apply for, you can free up a considerable amount of money each month which you can then invest in other areas.

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