The Use of Credit Cards

A credit card is another financial arrangement through which you can pay for goods and services. It allows you to purchase items while you pay later back to the credit card provider. It’s a kind of loan you receive from your credit card provider to pay for items rather than funding from your account. It permits you to spread the cost of purchasing an item over some time to save you the time needed for saving money before you can make the purchase. This opportunity gives individuals more purchasing power while still holding on to their fund in the bank account for extra time which can add wealth through time value to your money no matter how infinitesimal.

Credit cards can be used to purchase all kind of items without any limit from items with lower price to highly expensive items such as food, television, pieces of jewelry, and other services such as car hire, holiday trips and many more depending on your credit history. A specific amount is required to be played back each month to your credit card provider known as minimum payment which is a percentage your outstanding debt. Your ability to pay back your debt within 56 days will attract no interest fee, else, your debt will attract late payment fee.

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A credit card is also used for cash withdrawals from the ATM when you are in need of cash but out of funds. This offer always attracts a repayment interest fee. You can move available credit offer by your credit card provider through money transfer to your current account which can be used in cash directly from your bank account. This service also attracts fee balance transfer, but you can enjoy no fee balance transfer for a period provided to you by your credit card provider.

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With some credit cards, you can make a balance transfer from a card with existing outstanding debt to another credit card with a provider different from the other card.

The new credit card provider must be ready to take up your existing debt from the other card provider. You must be careful when using this opportunity to avoid incurring more debt that you can pay. There is an interest rate on this type of transaction but can also be averted if your credit provider offers you 0% no fee balance transfer for a particular period.

Generally, all countries of the world accept payment with credit cards. It can be used from one country to another compared to a debit card. There is a guarantee for card protection in most cases when stolen or lost. The bank can cancel the card if the incident is being reported to make you feel more secure with your fund.  Many issuers can provide a credit card on the market or by other financial institutions.

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You can make as many purchases no matter how big with a credit card. Offers you get from any purchase or transaction with your credit card depends on your choice of credit card provider or financial institution you want.

About The Author

Brenda Choi

Voted “Most Passionate Journalist” – She dedicates herself to bringing the most pressing stories and issues she can enlighten the world with.

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