Credit Card Guide

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A Credit card is a plastic card in which is issued to a bank account holder, once approved it allows the card owner to purchase goods on ‘credit’ in which they thereby agree to pay back the amount at a later date with interest on top of the amount they have initially paid. The cardholder will agree to the transaction by either signing to confirm or in most cases with the new chip and pin format, enter their individual PIN number.

Interest charges

Every credit card transaction is subject to an interest charge. Interest is worked out by the APR (Annual Percentage rate), different card providers will offer a ‘typical APR’ and the amount is usually agreed once the credit card is approved although some providers will stipulate that the APR is subject to change. The interest rate will then be added onto your monthly bill, some credit providers may waiver the interest if the entire amount is settled within a month of being used to purchase.

What are the benefits?

The main benefit is the convenience it offers the customer, allowing them to pay for items with credit and to pay for them at a later date. Some people find it allows for much more convenience in not having to carry cash around, as most shops and services will accept all forms of credit cards. They also offer fraud protection and better cover than a standard debit card, meaning the card owner has better peace of mind.

How do I apply for a Credit card?

To apply for a credit card you will need to go through the appropriate lending party i.e. a bank, you will then be subject to a credit check. A credit check looks at all previous financial history such as mortgages, previous credit cards, loans etc. This will then give them an indication of the likelihood that you will pay the money back. Once the credit check has been complete and approved you will then be issued a card in which payments will be set out on a monthly basis subject to typical APR on top.

If you are looking to purchase credit cards in the near future you may wish to look online to find the providers that offer the best reward credit cards to you. You may also wish to look for cashback credit cards in which give you the opportunity to obtain cashback on all purchases.

Article Source:http://www.articlesbase.com/credit-articles/credit-card-guide-1079862.html

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