Credit Cards

By now, you have probably seen hundreds of credit cards in your life. They have changed the way people spend money online and in stores, and chances are you’ll get one when you’re on your own. Before you do that though, you need to know what a credit card is and how you should use it. This guide will help you out.

A credit card is nothing but a tool. Whether its effects are helpful or harmful depends on the skills and knowledge of the user, a person with the power to choose how to use the tool. Here is everything you need to know in order to make the most out of this particular financial tool, taking advantage of its benefits without falling into any traps. Here are some of the common traps for dealing with credit card rewards.


Credit cards are not for everyone. Like tools, in the wrong hands, they can be dangerous. If you have personality traits like a tendency to lack self control, if you’re in the process of repairing your finances, or if you’re not ready for personal responsibility, avoid credit cards until you are mentally and emotionally prepared.

What is a credit card?

A credit card is a plastic card that represents a line of credit. A line of credit is an account with money that you can borrow repeatedly. In most cases, this is not going to be your money. It is going to come from a credit card issuer, like Chase or CitiBank. You will usually have more than one issuer for a single card. Your account will be assigned a certain limit based on the information from your application. Then you can swipe your card as needed to spend money out of it.


The money you spend on a credit card has to be paid back. If you do not make your payments by a certain day of the month, you will have to pay interest, and potentially a late fee. We’ll go over all of this in a little bit, but you have to understand one thing…


A credit card is not a source of free money.


This is not a scholarship, donation, gift, or anything along those lines. It’s something you can use when you need money, assuming you will pay it back.