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Thinking about dipping your big toe into the wide world of credit cards? Then you’ve come to the right place. Getting your first credit card and all those credit card payments might sound intimidating, but it really doesn’t have to be.
In fact, once you know a bit more about what kind of credit card you want and how you plan to use it, you’ve already done most of the leg-work and are ready to open a credit card account.
Some of what you need to know about credit cards is what makes them different from debit cards, and how you can use one to boost your credit score. We’ve got all the details that you need to know about obtaining and using a credit card responsibly.
What Is a Credit Card?
A credit card is a physical plastic or metal card that can be used to make purchases, pay bills, or even withdraw cash (also called a cash advance). You can use a credit card the same way you would use a debit card, to shop online or in person. The main difference between credit and debit cards is that with a credit card you’re borrowing money.
While debit cards work by withdrawing money you already have from an account, your credit card takes money from a line of creditwhich you will then be responsible for repaying at the end of each billing cycle, usually every 30 days or so.
Having a credit card and paying it off in full each month is a great way to build credit or improve your credit score, which is something you’ll need if you ever plan on applying for a bigger loan — like a car loan or a mortgage . Credit cards are also great for their rewards systems, since many will award points that can then be redeemed for cash back, gift cards or even travel rewards.
Because a credit card is a form of borrowing, it can also lead to debt when misused. Credit card interest rates tend to be higher than other loans, which is why it’s best to only spend what you can pay back each month. This guarantees you ‘ll reap all of the benefits of a credit card…
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