Credit cards enable you to borrow money from the bank by paying the bill in store or withdrawing it in the bank or ATM. All credit cards are credit lines. When issuing a credit card for any customer, the bank sets a limit on the amount that you can spend using the card. That limit is only up to your activity that is presented to bank and it goes from a few hundreds to several thousands of dollars. You can then use the card to pay for goods or withdraw cash from banks, up to the limit set on the day of agreement.
Once in a month you will get the monthly report about your credit card. There you will find all data about your payments during the month and also the debt from earlier period, if there is one. Banks can allow a sort of grace period which means that you will be able to pay the debt by making new expenses on the card without calculating the interest.
You can also choose to pay less amount than it is calculated, and it is usually noted as minimal payment amount on monthly report. Of course, you can pay the whole amount or any that you can at the moment, but minimal is obligated. The bank will calculate the interest on remaining amount of debt, in order to terms from the agreement of credit card you signed. The interest is usually calculated upon on daily amounts of debt during the period of one month.
Advances of credit card
If you are questioning for advances of credit card usage, here are some facts about that. Payback time – instead of permanent paying the bill, credit cards provide paying some expensive goods and services during some period, which makes the expense more easy to handle. Safety – having a credit card is much safer than carrying cash around. If you lose the card, you can stop abasement by calling the bank immediately 24/7. Simple currency exchange – credit cards often offers good exchange rate when paying in foreign currency, so you won’t have to carry much cash or visit the exchange offices when having a trip to foreign country.
Every credit card is linked with the agreement which includes all rules and terms which apply to the relation between you and the bank. The agreement will precise all sorts of wages, expenses, exchange course alignment and also penalty interest in case of delaying orderly payments. Check out some usually expenses that you can meet on your credit card:
It is charged on the remaining unpaid portion of the debt.
The fee for delay in repayment of debt
it is charged when your payment is not made on the deadline given by the monthly report. Some banks increase the interest rate in case of frequent delays in payments, so be aware and orderly pay your debts.
The withdrawal fee
It is charged when you use your credit card to withdraw money from the bank or on the ATM.
Due fee – the fixed amount that is charged monthly or yearly, and it includes the service of possessing the credit card.
Fees and charges may be calculated on the basis of a fixed amount or to be based on the percentage of the transaction amount, or both. In some cases, banks have the right to change the interest rate for credit cards, so make sure you understand the circumstances that allow the bank to change the interest rate.