Crash Course in Credit Cards: What Your Bank Won’t Tell You

Credit cards are great when you need them, but if you don't know how they operate, they could be dangerous. This is a no-jargon guide on credit cards and responsible usage of them.

Essential Credit Card Information: What Are They?

All a credit card is is a loan from the bank you pay back later. Your card swipes cause the bank to pay the retailer. If you do not clear the balance, you then pay back the bank—usually with interest.

Knowledge of Your Credit Score

Your credit score reads like a financial grade card. A high score—750 and above—indicates your debt management skills, and lenders trust you. But carrying heavy balances or skipping payments will pull it down.

Late Fees and Interest Rates

Should you have a balance—that is, fail to pay your full credit card bill—you will pay interest, usually quite high (up to 40%). Steer clear of that by paying your card in whole every month. Cashbacks and Reward Programs

Typical benefits of credit cards are discounts, airline miles, or cashbacks. Recall, though, these are only incentives. Spending carelessly in order to get rewards will cause you more debt than advantages.

Make wise use of credit

Build your score with your credit card, but only spend what you can afford to pay back. Never pay just the minimum; set up automatic payments and monitor your balance.

In summary, credit cards are a two-edged blade even if they can help one properly manage their money. Use them sensibly; they will benefit you down the road.