Understanding the various aspects of a credit card

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Cardholder Benefits » Understanding the various aspects of a credit card

Understanding the various aspects of a credit card

The content is accurate at the time of publication and is subject to change.

There are several aspects of a credit card and you will need to understand all of them in order to benefit from credit cards. There are both advantages and disadvantages to spending on a credit card. The key is to understand the features available on your credit card and plan your expenses well.

The interest rate and credit limit

These two are the most important aspects of a credit card. In order for you to have a better credit history, it is imperative that your credit card charges a lower APR or interest rate and offers a higher credit limit. Higher the credit limit, lower will be the utilisation of your credit available and therefore better it would be for your credit rating. Similarly if you have an outstanding debt, you will need a card with lower interest rate, so that you can save on the amount of interest paid on the debt. Therefore you will always need to understand how these two features work before going for a credit card.

Cost and Penalties

A lot of credit card customers tend to ignore the cost involved with the credit cards. In other words the fees you pay, the penalties on the card, etc. will all add to your debt. So, you must make sure you go through the fine print and understand what kind of costs and penalties are levied by the credit card company. The standard penalties include late fee for missing bill payment deadlines and overdraft fee for crossing credit limit in terms of outstanding balance. There are numerous other costs involved with a credit card as well. Annual fee is waived off in some cases, but in a lot of cards it isn’t. This adds to the outstanding debt if any. There are other types of fee like currency exchange fee, when you spend on your card abroad, cash withdrawal fee if you use credit cards for withdrawing cash at ATMs, etc. There are some special types of fee too like the balance transfer fee, charged under specific circumstances.

Loyalty points and rewards

Understanding you credit card also involves understanding loyalty points and rewards offered by the credit cards. You must make sure these rewards help lower your outstanding balance and debt incurred, rather than making you spend more. Therefore you should take credit cards, whose rewards bring actual benefits without any specific conditions that would lead you to spend even more.

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.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Cards for Travel from Our Partners: Winter 2019 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Winter 2019 – Expert’s Choice

Posted: December 17, 2018

Nights are still drawing out, the wind is cold, and the air smells like snow already – the winter is close. Christmas and holiday season are approaching swiftly, and overwhelming gift ideas are swirling chaotically in your mind. Ready or… Continue reading

Credit Card Tips For Holiday Shopping 2018

Credit Card Tips For Holiday Shopping 2018

Posted: December 15, 2018

November and December are the busiest months as gift shopping reaches its peak. People rush around looking for the best gifts and the best deals leaving a lot of money in the shops. Holiday season may force you to go over the household… Continue reading

Credit Cards to Save More on Holiday Shopping

Credit Cards to Save More on Holiday Shopping

Posted: November 25, 2018

Discounts and special offers are available all year round. Werther you are a bargain hunter or an impulse buyer, make sure you check online discounts and special offers. Also, if you are a cardholder, see if your credit card opens the door… Continue reading

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!