Credit cards allow you to make purchases without having to immediately pay for them with cash or money from your checking account. Essentially, you’re using the credit card company’s money, and then you pay it back.
The credit card company (also called a credit card issuer) will send you a bill about once a month telling you how much you owe and when to send your payment by. If you can’t cover the whole bill, the issuer adds interest charges to your account. Those are the basics, but this explainer on how credit cards work will help you understand everything you need to know about the cost of carrying a credit card balance.
Choosing a credit card requires you to take an honest look at your habits and needs, and see how those line up with the products out there. To get started, here are six tips for matching your needs to the right type of credit card.
Before you can make a decision about opening any credit card, you need to understand the value and drawbacks of credit cards as a whole.
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Follow these steps to apply for a credit card: