How does the card work? Is it a loan or credit card... - Other Questions


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Credit Card Applications » Questions » User Questions » Other » How does the card work? Is it a loan or credit card and where can you use it?

How does the card work? Is it a loan or credit card and where can you use it?

Answered on | Updated on September 26th, 2013
The content is accurate at the time of publication and is subject to change.

Credit cards are like a loan which is extended to you by the issuer under certain terms and interest determined by your creditworthiness. You can avoid paying the interest if you pay off the entire balance by the due date every month. The credit line extended is also determined by the credit card issuer and depends on applicant’s creditworthiness. Also, cards may have an annual fee or a monthly maintenance fee.
Credit cards can be used everywhere they are accepted online and in stores. Also, sometimes you can pay bills with your credit cards. Most issuers report credit activity to the major credit bureaus. That means you will be able to build your credit history by making payments on time and staying within credit limits.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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