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4 Things To Know About Credit Cards

By Author: Neha Sharma
Total Articles: 243

Shopping with a credit card can be a delightful affair, as you can buy whatever you want, no matter the cost. However, credit cards can also be a double-edged sword as they can make you overspend and then a few days later, you will be stuck paying your credit card bills. That is why you should be aware of a couple of things before getting a credit card. They are as follows:

1. Difference between secured and unsecured credit cards- Two types of credit cards are there- unsecured and secured. If you choose to go for a secured credit card, then you will have to pay a certain amount of money as a deposit, which will act as caution money, in case you fail to pay your credit card bill. If you ensure that you will pay all your bills on time, then the company will provide you with a secured credit card and return to you, your deposit money.

Unsecured credit cards, on the other hand, are the most commonly used ones. They are not secured by collateral such as auto loans or mortgages. This means, they are not directly related to property, which the lender can seize if you fail to pay the credit card bills.

2. Rewards program- Before you apply for a credit card, make sure that you go through their rewards program thoroughly. Every credit card company offers various rewards, every time you use your credit card. From offering cash back when you purchase flight tickets to providing gifts after you accumulate certain points, buying a credit card can be quite a lucrative option for you. Hence, go through their rewards program before zeroing on a credit card.

3. Credit limit- Credit limit is the maximum amount of money that your bank will provide in your credit card. In case you cross that limit, you will not be able to purchase anything further with your credit card. However, if you are buying a credit card for the first time then your credit limit will be quite low, as you still have not proven yourself to the bank about your ability to pay the bills.


4. Consequences of not paying bills- If you fail to pay your credit card bills on time, then you will have to pay a lot more interest than usual as a kind of penalty charge. Another thing that you should keep in mind is that this will affect your credit score. Having an unimpressive credit score can spell trouble for you as it may harm your chances of getting other credit cards in the future and affect your mortgages.
Before you apply for a credit card, doing proper research about it can help you understand everything that is essential so that you can take an informed decision. After all, purchasing a credit card is a kind of investment you are going for.

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