Choosing the best credit card for you.

Credit vs Debit

To understand credit cards, new users have to understand the difference between a debit card and a credit card. The main difference between a debit card and a credit card is the purpose that they both serve the user. A debit card deducts money from their personal bank account without a penalty whereas a credit card is borrowing money from the bank and then paying back the bank at the end of the month. Also, a debit card has no late fees and no interest rate which does not build credit over time but, a credit card helps build credit but includes different interest rates depending on which bank users go to and how many times people have been late on bills. This is important to explain to new users because interest rates are the main factor that reflects on credit scores. People can fall into debt if not careful with their spending and paying their credit cards on time.

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Terms and benefits

The first thing a credit card user should acknowledge is the terms and conditions of the current credit card they were awarded by the bank. Some essential things a credit user should know should be the credit limit, the minimum, the interest rate charges, and late fees. When you receive your credit or even before the banker should be able to explain how much you are allowed to spend on your card. For customers to understand the rules of credit cards depending on their institution it is important to ask the banker the terms and conditions of their credit card because credits vary at different rates. Be sure to read over the paperwork on the credit offer, this will be crucial to your use of the card. Some credit companies even offer rewards for using their card.

Credit cards can get you discounts and reward points. A lot of people do not use credit cards to their full potential because bank employees do not explain things correctly or even do not tell them about the discounts and rewards that come with a credit card. Some credit companies offer discounts for traveling and cash back. This is important to explain to customers because it can help the user get money back from purchases and some companies may offer to pay for some traveling expenses depending on accumulated points from spending. Lastly, some companies offer discounts on gas prices for commuting to work and discounts for purchasing groceries.

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Limits and payments

Another concept that people should know about credit cards is how to maintain good credit. In order for people to get good credit they have to use less than thirty percent of their total credit limit. They also have to make sure to pay more than the minimum, to lower the amount of interest paid.

Paying before the due date can benefit your credit score. Paying after the due date will result in interest charges and a bad score. Lastly, a user should also be responsible with their spending, and only be able to spend the amount of money they are able to pay back over the next payment

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How to get one?

Applying for a credit card can be really easy, Your bank will usually provide you with some options that can be tailored to you. Many of these will offer decent reward points that you can use for flight miles or exchange for discounts or cash. Talking to a banking associate can make this an easy process. Many banks can also issue you a credit card online. If you choose this method, make sure to read the fine print. Many banks also allow you to set up autopay easily. When first starting out, your credit limits might be really low. After a year of constant payments, you can ask your bank to increase your borrowing limits without having to open another card.

There are also sites like Credit Karma that allow you to apply for credit cards easily. Credit is easy to manage, you just have to know what you are doing.

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