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How Should You Use Your Credit Card?

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Our society is based on credit. Rarely do we find people who hold only cash anymore. It takes care of necessities like a house, a car, and even tuition fees. If we are not able to pay for a house or even buy a car and we really need it, there are loans that we can turn to where we can borrow money and pay them later with a payment plan. Credit cards have the same idea. We do not usually carry too much money for security purposes so we rely on electronic credit cards to do the job.

What is a credit card?

A credit card is an electronic plastic card the size of an ID card that allows people to buy things and services with it. You will not use your own money when you use it but you have to pay for the bank’s. It has a certain limit as to how much you can spend every month and that is called a credit limit. This is usually issued by banks and it is monitored through a credit card account. This account will record transactions that you made and see whether you are over your spending limit or not. If you go over your limit and you were not able to pay your balance at the end of every month then you will be charged a fee and of course, interest.

How do I use a credit card?

Basically what you need to do is apply for a credit card account first. When you are approved and your bank gives you your card, you need to sign the back of the card. This will be the basis of merchants to prove that it is you who is using the card. Next, you need to establish your personal identification number or PIN. This is additional security when you use credit cards. Now, retail stores do have electronic devices that recognize the card. After you have bought your stuff, the cashier will ask for your card, swipe it in the device and will generate a receipt. This receipt you will sign and the cashier will double check your signature. If everything is in place, keep your receipt for future references and keep your credit card number to yourself.

Can I use my card frequently?

There is a limit to your card. You can use it as frequently as you need to but not to go over your credit limit. Going over will cost you fees. Plus, if you can not afford it, don’t buy it. it will affect your credit score if you are not able to pay all the things that were charged to your card.

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