All About A Credit Card

Question two of the website is, what is a credit card and what purpose do they have? Yeah, so it is two questions in one and you would think everyone would know the answer to this one, but I will answer it just in case everyone does not know. It is pretty simple. A credit card is a plastic device that is attached to an account with a credit limit. The device allows customers to make purchases or take cash advances against a line of credit. Bills are sent monthly to customers for the charges made with a minimum due.

A credit card has many purposes, first it helps build positive and negative credit. I never said the purposes has to be good. LOL By paying on time monthly and not going over your credit line, along with many other factors helps build positive credit. Of course the opposite of that builds negative credit.

The next purpose of a card is convenience. It is more convenient that carrying cash because if you lose the card or have it stolen, you can get it replaced. While one of these happens with cash, you cannot usually get it back. Also it is usually in my opinion faster than writing checks. On top of that, who wants to wait in line at the convenience store for someone writing a check these days? Of course on the other hand sometimes you have to sign for a charge, but that is still quicker than writing a check.

Another purpose of a card is protection. Banks allow you to dispute charges that are incorrect and also they provide you with insurance services on some purchases and things such as lost luggage and accidental death insurance on travel purchases. Check with your bank for specifics about their programs.

Another purpose of cards is a lot of times emergency purposes. If you have a high enough credit limit, you can charge that air conditioner that just went out of your home, some other home repair, or many other large items. Imagine if you had a cash reward card how much you would get back on an air conditioner purchase! Emergencies happen when you least expect them to. I always like to have at least one backup card. They are good for traveling too, but I never leave the home without cash either.

Finally, I will leave you with a question about credit to think about. How do you use your credit card wisely? Visit another question at the links below.