By: Przemek Gradzki
Forms of Credit
Credit Card :
- Allows consumers to purchase goods and services against their line of credit and pay for them later. A student credit card gives consumers the option to pay the outstanding balance each month or to pay over time.
- Yearly cost of owning a credit card. Many credit card companies offer cards with no annual fee.
Interest Rate :
- The rate a lender charges for use of its funds.
- Automated Teller Machine through which you can access your checking or savings account with your ATM, debit, credit or check card.
Credit Line :
- Also known as credit limit, this is the maximum amount that you can charge on your credit card.
You are able to use a credit card almost anywhere. You just need to make sure that your type of credit card is accepted (Visa, Master Card).
There are some benefits of using a credit card. First of all you can buy now and pay later. No need to carry cash. You build your credit history. Possibly of earning rewards. There is a Credit Limit so you don't go over your allowed limit.
While there are benefits there also are Penalty fees for using a credit card. Some credit cards can have Annual Fees. Credit cards charge an Interest Rate (APR) for using the lenders money. Some credit cards also have Over-the-limit fees. When you go over your credit limit you are charged a fee.
Credit Card Traps
- Important information is provided in the fine print. Not knowing about it can hurt you later.
- If you pay the minimum payment every month you may be on the hook for a very long time.
- Late payments can raise your interest rate from 7% to 27%!
Monitor your credit card and bank accounts online at least once a week to watch for unauthorized charges.
When shopping online shop only from protected and verified vendors.