Credit card general information

credit cardHaving a credit card offers many conveniences that would otherwise not be available to the consumer, even if they have no desire to defer payments. Usually a credit card will be required in order to make reservations for hotel rooms, rent a car, and often to rent anything else.

What exactly is a credit card? It is a card issued by any one of several agencies that allows you to use the card to pay for anything for which credit cards are accepted, and the agency keeps a record of the total amount spent. At the end of the billing cycle (usually a month, or 30 days) you usually must repay the full amount or else a finance charge will be assessed on the total balance, and a percentage of the total MUST be paid, or else your credit rating will suffer and extra fees will be charged, and many times your future interest rate will be increased. Some cards require an annual fee to be paid for the privilege of owning the account, and some are free. Most charge an extra fee for such conveniences as a cash advance, available at many ATM’s (automatic teller machines).

Some of the benefits of owning a credit card include the ability to use it to make hotel reservations, rent cars and other things, etc. Another advantage is that you are able to buy things you don’t already have the cash to afford at that time. Some people like to use credit cards to simplify their bookkeeping, having everything appear on their monthly statement for easy record-keeping, or using separate cards for different purposes, allowing you to keep personal expenses and business expenses separate, for example.