Updated on May 31, 2024Table of Contents
A credit card is a plastic card issued by a bank that allows you to borrow money and make purchases. It’s commonly used for convenience and security, offering various benefits like cash back, rewards points, and purchase protection.
If you’re interested in getting a credit card, you can compare different options online and apply for one through your bank.
What is a credit card in simple words?
A credit card is a small plastic or digital card that allows you to borrow money from a bank to make purchases. You can use it to buy things now and pay for them later, either all at once or over time.
How do credit cards work in simple terms?
When you use a credit card, the bank pays the seller on your behalf. You then receive a bill for the amount spent, which you can pay in full or in smaller amounts over time. If you don’t pay the full amount, the bank charges interest on the unpaid balance.
What is the real use of a credit card?
The main use of a credit card is to make purchases without needing cash immediately. It can also help in building your credit score, which can be useful when applying for loans or mortgages in the future. Credit cards also offer convenience, rewards, and protection against fraud.
Who is eligible for using a credit card?
Generally, anyone who is at least 18 years old with a stable income and a good credit history can apply for a credit card. Some banks may have additional requirements like a minimum income level.
Is there a fee for having a credit card?
Some credit cards come with an annual fee, while others are free to own. However, other charges, such as interest, late fees, or fees for cash withdrawals, may apply if the card is not used responsibly.
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