A credit card is a plastic card used to make payments at a brick and mortar store, or online, on credit. You do not need to have funds in your bank account to use a credit card.

Instead, you get “credit” from the card issuer to pay for goods and services, and you can pay the debt at the end of the month without interest.

However, if you pay later, the credit card issuer will charge you some interest. Read on to learn more about a Credit Card.

What is a Credit Card

Benefits of Using a Credit Card

Spend More Now

A credit card allows you to spend more now using credit, and pay back the debt you will have incurred later. You do not have to wait for the paycheck to buy something you need urgently.

Safe and Convenient

It is safer to carry a credit card than hard cash, and unlike personal checks, credit cards are widely accepted.

Build Your Credit

When you use your credit card frequently and then pay your debt on time, you earn points. The more points you have, the more creditworthy you become.

In turn, that allows you to spend more on credit, thereby increasing your buying power.

Get Discounts

When you buy more with your credit card and repay your debt on time, you get some of the money back. Many credit card issuers give back about 1% of what you spend with their card.

The Downside of a Credit Card

Digging Yourself into Debt

You can easily spend more credit than you can repay if are not careful. A credit card lets you borrow based on your ability to earn in the future.

Therefore, it is important to borrow within your weekly net income range.

Overspending

You can easily overspend using a credit card, which will force you to live frugally, in order to pay your debt.

Destroy Your Creditworthiness

You can easily ruin your credit score by making late payments or missing to make some.

Debts Can Skyrocket

Even when you spend less with your credit card, high-interest rates can make a small debit to skyrocket within a few months.

How to Choose a Credit Card

You need to choose a credit card that allows you to borrow more, pay less interest, and earn points when you clear your debt on time. Here is why that is important.

Borrowing More

If you can borrow more and invest it in services that can generate your income, you can increase your income. However, if you have to pay high-interest rates, you can easily ruin yourself financially.

High-Interest Rates

High rates prevent you from borrowing more because they force you to pay a lot more than you borrowed. Low or no interest rates allow you to pay your debt fast, and break-even much faster.

Credit Card Points

A card issuer that allows you to earn points makes you creditworthy. That allows you to borrow more, not just from the credit card issuer, but also from other lenders.

Moreover, since creditors consider you a safe borrower, you get credit at much lower rates from new lenders too. Credit points are therefore a vote of confidence in you, from your lenders.

Get a Credit Card Today

We hope you found this credit card guide to be informative and engaging. We can recommend some of the best credit cards in the market.

Contact us now, and let us discuss which credit card issuer matches your financial needs.