A credit card can be used instead of cash and allows you to pay for pretty much anything you want from groceries to fixing your car to a holiday. However, the money that backs these purchases is a type of loan that must be paid back often with interest added or other fees. You can often pay back an amount each month until the debt is paid back but if you spend more than you can manage you could end up in financial difficulty. A limit on how much you are allowed to spend will be determined by the provider of your card and will depend on your individual circumstances.
- Are convenient and easy to use
- Allow you to pay back the loan in installments
- Offer a grace period if the amount spent each month is cleared during the grace period, interest won't be charged – the length of time varies between providers
- Offer protection against fraudulent transactions
- Offer protection against loss or damage cover on purchases
- Offer insurance protection
- Offer loyalty programs
- Some credit card providers offer zero or very low percent for interest on money they can lend for anywhere from six to eighteen months plus. Once this time frame expires than higher rates of interest will apply. If you make a minimum payment each month you will likely just be paying off the interest and not the original loan amount.
You can get into serious money trouble if you fail to pay the money you owe on your credit card and this can have detrimental effects on your credit rating, may result in bankruptcy or being taken to court for repayment of the debt. Origins
In 1921 Western union gave charge cards to regular customers, which were printed on paper card stock. From 1928 several companies started to accept each others cards and in this year the Charga-Plate was created which was a small rectangle of sheet metal similar to the metal used for dog-tags and embossed with the details of the holder with a strip of paper on the back for the holder's signature.
In 1950 Ralph Schneider and McNamara expanded the use of paying merchants using the same card. Then in 1958 American express created a credit card network, which was available, worldwide initially as charge cards and then credit card features were added.Specifics
There are numerous providers now offering some great rates on having one of their cards and they can be used for purchases or used to transfer and pay off existing debts at a possible lower interest, which often come with fees to do this. Many of these cards can be applied for online. Make sure you get some advice, read the information on each one and the terms and conditions about credit cards before you choose to get one.
Revised March 6th, 2016
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