Having a credit card on hand could either be helpful or it could be a financial burden, where you in a great credit risk. It’s really quite enticing to take advantage of the many credit offers – zero-percent interest, automatic approvals and balance transfers. However, it would be of a greater advantage if one can effectively and efficiently manage his cash flow by not succumbing to such credit risks; that may be a consequence of improper use of credit cards.
Check these tips to help you decide whether accepting any credit card offers will be helpful or not-
What Are Credit Cards?
• Credit cards are the small plastic cards usually issued by financial institutions such as banks and credit unions.
• Credit cards serve its purpose as a method of payment – to pay for the products and services in accordance to the card holder’s pledge to pay for the credit purchases.
• Financial institutions who issued the card will make a rotating account and grant the card holder a credit line. This is the maximum amount of money the holder will borrow to pay for the merchant or as the card holder’s cash advance.
• The merchant is the firm that provides the products or services. Cash advance refers to the money the Financial Institutions allow to be withdrawn up to the amount of the credit limit.
• Card holders are allowed to have a continuing balance of debt and are subjected to an interest charged.
• Credit cards differ from that of debit cards in that the latter can be used as cash or currency.
