Credit Cards

Credit cards are the most useful thing when you need to buy something really urgent and you don’t have the necessary cash or balance in your account.
Nowadays, getting a credit card has become a must in every house and everyone is just applying for this card online or offline but there are so many types out there that deciding among them which is the best credit card is really a tough job and if you are not well versed with the banking terms out there it will be really a jargon of information making no sense at all to you.
So trying to solve this issue we have made this website for the common people who are unable to grasp the banking terms.

In this website, we have made those terms simpler by giving real-life examples of how that type of card can help you in your daily life how can you save money just by using a Credit Card instead of Debit and your other queries like how to apply for a credit card online, we will be taking care of everything that lies under Credit Cards.

We have listed almost every Credit card providers within the USA and compared the top credit cards offered by banks.

How To Get Credit Cards

A credit card is a card issued by the financial institution which lets the cardholder borrow money from the card issuer to pay a person or organization based on the cardholder’s promise to pay back the borrowed amount to the financial institution.

In a nutshell, a credit card enables you to borrow a certain amount of money from a bank to purchase goods and services. You don’t have to pay an extra amount to the bank if you repay within the “Grace Period”, which is normally 25-30 days from the date of borrowing the money.

If you are unable to pay within the Grace Period, then you have to repay the borrowed amount along with an interest. The interest will be a certain percentage of the amount borrowed. The bank might allow the cardholder to get a Line of Credit which means that the holder can borrow the money in form of a cash advance. The bank fixes the borrowing limit of the user on basis of his/her credit rating.

Credit Card and Debit Cards – Difference

Credit cards and debit cards almost look alike. The 16 digit card number, the expiry date, the PIN code are all common in both the cards. But what differentiates them?

The main difference between a Credit card and a Debit card lies in their functionality. A debit card enables the cardholder to use the money that they have deposited on their bank account for withdrawal or purchasing purposes i.e. you use the money from your checking account.

On the other hand, a credit card enables the cardholder to borrow money from the bank to purchase things and re-pay that amount back within a certain time span.

Apart from the obvious difference, there are numerous differences between the two cards. Credit cardholders will have a borrowing limit based on their credit rating whereas a debit cardholder can withdraw as much cash there is in his/her checking account.

When your credit card is swiped, the bank pays the merchant account on behalf of you, which you have to repay the bank later on. When your debit card is swiped, the funds are transferred to the vendor’s account from your checking account.

Credit Cards Facts


A financial institution issues a credit card to the cardholder to purchase goods and to pay for things offline and online. The card issuer comes in an agreement with various merchants to accept their credit cards as a medium of payment. That’s why you see various merchants stating that they accept certain credit cards. You can also balance transfers and withdraw cash from the checking account.

Interest Charges

Interest charges are the amount that the bank charges while collecting the amount borrowed by the cardholder. The interest charge is a certain percentage of the borrowed amount. If you repay the full amount that you have borrowed each month then the bank won’t charge an interest charge.

The exact method by which the interest charge is determined is normally detailed in the cardholder agreement which is summarised on the monthly statement.

Grace period

The Grace Period is the span of time granted by the financial institution to the cardholder to pay back the borrowed money through the credit card after which the bank will extract an interest charge from the cardholder. The Grace Period varies from bank to bank. Normally the Grace Period is 25-30 days.

If a cardholder is late to repay the borrowed money and exceeds the Grace Period the interest charged by the financial institution is dependent upon the interest rate and the balance.

Types Of Credit Cards

There are four types of credit cards. Namely,

Business credit card

Business credit cards are issued by the bank to businesses or organizations and this card can only be used for business purposes. This card is the best option for businesses as the business credit card exclusively offers special rewards in areas such as shipping, office supplies, travel, and many more which not only make business easier but also a successful one. The use of business credit cards has doubled in the last decade. The credit card issuer issues the card on the basis of the applicant’s credit score.

Secured Credit Card

Secured credit cards are secured by the depositor account of the cardholder. The cardholder has to deposit 100% to 200% of the total credit they desire. You can make regular payments with the card. A secured credit card lets you recover the cost of purchase which has already been paid to the merchant out of your deposit.

The main advantage of the Secured Credit card is that it allows a person with a negative or no credit history to own a credit card which wouldn’t be normally available.

Prepaid Credit Card

The prepaid card is not an actual credit card in the true sense of the term “Credit Card”. This is because the card doesn’t offer any credit. The cardholder gets the money that has been deposited in the card by someone like an employer, parent or even oneself. However, it functions as a credit card and it is perceived as one.

Prepaid cards are mainly marketed to teenagers so they can be financially mature and avoid debt problems later on in their life

Digital Card

A digital card is the online equivalent of any kind of identification and payment card such as a debit card or credit card.

Benefits of Cardholder

 One of the main benefits is the ease at which the cardholder gets short term loans quickly without the need for calculating the balance before every purchase or transaction.

Credit cardholders get loads of rewards and benefits such as enhanced product warranties at no cost, free loss or stolen coverage on new purchases, and various insurance protections.

Credit cards offer a loyalty program which offers the user with reward points for each purchase. The reward points can be later redeemed as cash or products.

Demerits Of Cardholder

Credit Cards have a fair share of demerits

Credit cards result in a high-interest rate and result in bankruptcy. During the introductory period of six to twelve months from the date of getting the card, the bank charges a very low-interest rate. However, after the introductory period expires, the bank increases the rate to a very high amount. Thus, most of the customers cannot cope with the high-interest rates and thus become bankrupt.

Moreover, according to research, cardholders are more likely to spend more with a credit card compared to debit cards. This is because credit cards make the users believe that they have all the money they need by giving them loans. After getting the extra money customers to end up spending more while their borrowed figure keep on increasing. Thus, credit cards decrease the self-control of their customers.

Final Words

Overall it is safe to say that credit cards have a balanced list of merits and demerits. While you can get all the benefits of a credit card, you also have to bear the weight of repayment on your shoulder. If you are responsible enough to handle your finances, you can blindly go for credit cards.

Pin It on Pinterest