What is the value of a credit card?

A credit card allows you the flexibility of making a purchase when cash is not readily available. It also serves to give you a monthly summary that allows you to track your expenses. Credit cards also allow you to keep your money in the bank until the credit card payment is due. Be certain, however, to know that date and pay off your account, in full, to avoid interest charges. Know as well that, in many cases, were you to make a large purchase on the last day before the payment is due and miss that payment date by just one day, you could be charged a full month’s interest on the purchase. Credit cards also allow you to develop a credit rating. By using the credit card and then paying off the account in full and on time you can develop a good credit rating. Finally, credit cards are increasingly being used to secure reservations for hotels, rail and airline tickets, for example, and without them, you may not be able to reserve in advance.

What types of credit cards are there?

There are a number of different types of credit cards including standard credit, gold credit, secured credit, retail credit and charge cards to name only some. Make certain that you pick the one best suited to your needs. Each one offers different features and has different charges.

What is the difference between a charge card and a credit card?

There are a number of different types of credit cards including standard credit, gold credit, secured credit, retail credit and charge cards to name only some. Make certain that you pick the one best suited to your needs. Each one offers different features and has different charges.

What affects the limit imposed on the card?

Charge cards have no limit. However, you must pay back what you spend each month. American Express and Diners Club cards are examples of charge cards. Credit cards allow you to carry a balance, on which you pay interest, but they have a set limit on how much you can spend. Mastercard and Visa are examples of credit cards.

Can having a credit card help my credit rating?

Having no credit rating at all has about the same effect as having a poor credit rating. Having and using a credit card wisely and paying monthly statements in full and on time will establish you as a responsible individual and will make it easier for you to obtain credit.