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Introduction to Credit Cards

Credit Cards, much like a personal loan, are both based on your credit score (typically FICO) and oriented upon the available funds outlined in a predetermined 'line of credit' within a financial, or other banking institution.

Understandably, the higher your credit score is, along with salary, and previous (positive) history, the more likely you are to get a good deal on a (revolving: meaning monthly payments of) credit card, as well as interest rate, and overall approval. Unlike loans however, some credit cards require a minimum payment per month, and then any additional funds paid will be applied to directly pay down the interest that has or is accruing on your credit card and spending habits that month - or in general.

Other credit cards, however, do in fact require that you pay off the entire balance monthly - also known as non 'revolving' credit cards. It's understandable that such a more stringent credit card and plan would likely be linked to someone with less than desirable credit, or as a 'higher risk' consumer.considered likely to fail to pay back funds.

Like loans and similar banking institutions, often the same criteria and credit unions themselves whom offer banks or checking accounts also offer lines of credit and credit cards. These are different than charge cards however, as typically 'charge cards' are the ones in which require the full amount paid off monthly.


For those that may not qualify for a credit card due to a poor (FICO) credit score, not enough salary, or insufficient credit usage history; outside of a co-signer, it is also possible for one to apply for and successfully obtain a 'secured credit card'. A secured credit card in essence is one in which is created and based off of a collateral amount.required upfront by you before opening the ('secured') credit card. While some secured credit-card plans might allow you to spend up to $500 with a $250 collateral deposit, most will be more focused - realistically - on honoring and simply providing you with the maximum aggregate limit of that in which you.ve put up in collateral.

It's also worth noting that, unfortunately, most secured credit-cards have terribly undesirable interest-rates and can be difficult to even qualify for in some instances. Although it's an alternative to positively raising your credit, it inarguably comes at a heavy cost in many instances.

In today's modern world, credit cards are not just used as funds to pay for cyber-purchases, but are specifically being more frequently backed by their primary companies - such as Visa for example - in guaranteeing you your money, or purchase in the case of an item being lost, stolen, etc. which are all very desirable benefits and traits of doing business with your credit card - and in sharing your personal data online to make purchases.


It's worth pointing out that like anything in life, especially regarding finances, there can easily be pro's and con's, dependent upon your spending habits, sense of responsibility, personality, and so forth. Just as a secured or unsecured credit-card can be used to build credit; likewise it can be used to destroy your credit with irresponsible spending. Also, some creditors and general banking institutions have pointed out that having more credit-cards is not necessarily .better., nor is it considered in any way 'impressive'. In fact, many people that have a swath of credit cards in their wallets may feel more inclined to often spend.in many unfortunate instances, more money than they actually have, or is available to them by default. For example, those that abuse or take advantage of overdraft protection to withdraw and use funds without the intentions of repaying the debt or .covered charge..

Keep in mind and familiarize yourself with the terms cash, credit, and debit. Cash, of course, the money in your pocket, versus credit which is an amount in which you can 'charge off' on your credit card (from a line of credit, and typically pay at the end of the month or make payments towards), and then lastly Debit, which is the direct withdraw or charging of current funds connected to the account in which is aligned with your debit card - such as a Checking Account for example.






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