The credit cards can be used by swiping against a swipe card machine in merchant stores and every place that offers to use the credit cards. The magnetic strip has the user identifying data that confirms the amount of usage to the server of the credit card issuing bank and subsequent deductions are effected therein electronically.

The credit cards can also be used online by using a unique verification code that is present behind the card near the signature strip. The concept of credit cards is quite familiar to every Joe and John. It requires no special introduction. The credit cards are different from debit cards in that the amount used is from the issuing bank in case of credit cards unlike deduction from the users existing account in debit cards. The credit cards are instant financiers. The amount used from credit cards does attract interest charges.

There is a grace period within which the whole amount used in the credit cards should be re-payed. If the amount is not re-payed on time then the used amount attracts interest charges that are pretty high ranging from 2.75% per month to even more if the credit repayment is not pretty good. However if prompt payment is being made by the user by repaying the whole outstanding amount used then there may be no interest or extra charges and the card can be used happily as a mode for instant cash loans. In events where the credit cards due is not made in time, there are late payment charges and finance charges applicable as per bank norms.

The accessory charges are so killing that it may drain your whole pocket. The credit cards issuing bank offers the customer to pay minimum payment dues every month, but paying only the minimum payment due will lead the customer to be paying the sum for a long period of time with extended interests. Such repayment is really unwise. There are overdue charges, interest charges, lost card replacement charges, broken card replacement charges and a host of other charges that nearly rip every American off their wallets.

The main advantage of credit cards is that they hand the user in emergency. Extravagant use of credit cards and use of multiple credit cards puts anybody in trouble. The reward points in credit cards are useless if we do not make the total outstanding payment before the subsequent months billing cycle! It is a dangerous weapon quite useful and harmful too!

Comments (0)

Subscribe to this comment's feed