Almost more than half of the population of the world have bank accounts and use them for day to day transactions. Even though so many people have bank accounts but only a few of them will have credit cards. For example, in our household, only my father possesses a credit card whereas I on the other hand only possess a debit card on my account because I don’t earn enough to meet the minimum limit for maintaining a credit card. So let us look at what credit cards are.
What is a credit card?
The credit card is a financial product you may call it that one can use to carry out his or her daily transactions without having any money in their bank accounts at the moment. The name credit card says it all. The bank gives you a credit loan that you can use during the month without having to pay any extra interest.
Unlike debit cards, credit cards do that require you to have any amount of money in your bank. You can use a credit card to purchase groceries or pay for other products and services. But the most common use of credit cards is seen in buying expensive products or spending vast amounts for certain products and services.
What are the benefits of credit cards?
Now that you know what credit card is, you can quickly identify its most significant benefit. There are times during the month when our bank accounts are empty, but we need to pay for an emergency or want to purchase something. At such times banks provide us with loans on which an annual percentage rate is applied in the form of credit card debt. So with the help of credit cards, you can purchase stuff without actually having any money.
Followed by this, there are also certain other benefits that come with the use of credit cards such as travel rewards; cash back rewards and warranties on an individual purchase. The additional great interest about credit cards is that it can’t be used in any fraudulent activity so no unauthorized payments can be made on your behalf.
How to use credit cards properly?
If you want to get the additional benefits of credit cards such as the rewards, then you have to maintain a perfect credit score which means that you don’t have any credit card for bad credits. Try to Pay your debt back as soon as possible so that it
doesn’t pile up over time and gets difficult for you to pay back.
Hopefully you got some nice info and do not have to say “My account is in bad credit shape!”