How to use Credit the Right Way
The Basics of Credit
Credit Cards: What You Need to Know
As I previously said before, a credit card is little plastic card that has the power to increase your credit or to increase your debt if not used responsibly. Credit cards are used to purchase items by borrowing money from the credit card company until a certain date where you either pay in full or pay in payments. Most credit cards do not have annual fees, but some do. This means that a service charge is charged to you for the services that accompany the credit cards. You can use a credit card just about anywhere today, from online shopping to buying your groceries as long as it doesn't go over the credit limit. There are both benefits and costs of using a credit card. Some benefits include increasing your credit score by paying off the credit card bills on time as they come in. This would allow you to receive higher loans and have lower interest rates because you have prove that you are creditworthy. Some costs of using credit cards is that you have to pay interest on the money you don't back right away. Credit card company also have penalty fees for breaking certain rules that were discussed in your contract such as an over-the-limit fee which means you get charged a fee anytime you go over the credit card limit set out by your lender in the contract. So obviously there are a lot of ups and downs of using a credit card and it is your responsibility on which way you will use it.