Credit Card: Definition

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A credit card is your source of a financial help, which you can use up to the credit card limit. It’s a plastic card with a magnetic strip, which gives you an opportunity to buy goods and pay off for services wherever you are.

Along with withdrawing the funds from your credit card, you are obliged to make monthly payments to supplement your balance. In the case, if you don’t make a required payment, you will have to pay off the interest fee, which depends on the terms of the specific bank.

There are two types of the credit cards – secured and unsecured. Secured credit cards belong to the card holder’s savings account. The credit limit varies and can be as high as you want. It depends on the amount of funds, which your credit card contains. It is a perfect variant for those, who want to rebuild their credit history.

The unsecured card is available for people with a good credit history. An unsecured card requires no collateral and acts as a pre-approved loan usually containing a higher interest rate.

The major advantage of any credit card is that it provides holders with a financial support, which they, actually, don’t obtain in a real life.

Read about credit card alternatives here.