Plastic money has become so popular these days. And why not, it can be stored easily, can be carried easily and it is so easy to use. Debit Cards, Master Cards, Maestro Cards, Credits Cards and so many more. A thin plastic card will hold all your money, and can be used to take out hundreds and thousands from your bank account. But the fancy card is the Credit Card, a card that lets you shop freely even if you don’t have any money with you. Credit cards are great for those who don’t like carrying money with them, and prefer to use plastic money for buying things. Getting a credit card is not an easy task, but using it is. Here we will tell you how to use a credit card. At the end of this article, all your doubts would be gone.
A credit card is a plastic payment card which is issued to cardholders. It enables the cardholder to make payments to a merchant for goods and services. The cardholder makes a promise to the issuer that he will pay all the money for the amounts he pays, including the other agreed charges. A revolving account is created by the card issuer and the issuer grants a certain credit limit to the cardholder.
You can get a credit card from certain places such as:
- Major credit card issuers – If you are a college student, then you will have a great chance of getting approved by a major credit card issuer for a student credit card. But not every card with ‘student’ in the title is a good deal for you. There are certain student credit cards that have very high-interest rates and annual fees as well.
- Your bank – If you have a current or savings account in any bank, then try to apply for your first credit card at your own bank. Having an account in the same bank can improve your chances of getting a credit card application approved. If you have handled your account responsibly, then you are surely going to get the application approved. Rather than applying online, visit a bank branch. It will put you face-to-face with a representative which can help you in getting your application approved.
- Retail or department store – Retail and department stores have very easy credit card approval, but they have high-interest rates. Such cards aren’t versatile; you can use them in that store only.
- Secured credit card – When the lack of credit history or bad credit history stops you from getting a standard credit card, you can try applying for a secured credit card. Having a secured credit card, you have to make a deposit against the credit limit of your account. The bank takes the deposit if you fail to make the payments.
With a credit card, you can spend money on credit. You can spend up to a certain credit limit, which can be anything between a few hundred to several thousands of pounds. The credit limit is set depending on the chances of you to pay it back. If you pay off the bill every month in full, then you won’t pay any interest on the money you borrowed. If there’s any outstanding balance, then you will have to pay interest on it.
To use a credit card in a store to pay off your bills, you need to follow these steps:
1) Sign the back of your credit card – If you haven’t done that yet, do it. The merchants match your signature with the one on the signature panel to distinguish if the card belongs to you or not.
2) Swipe the credit card in the machine – Swipe it yourself or present it to the cashier to do it for you. Different stores have a different policies regarding how credit card purchases are made.
3) Present your identification to the cashier to prove that the card belongs to you. If the cashier doesn’t ask, volunteer to show it anyway. Chances are that the store has a policy requiring cashiers to ask to see ID’s, though some cashiers get busy and forget. Showing your license will remind the cashier to take an extra second to protect the identity and credit cards of all customers.
4) Sign for your purchase – Do your signature on the receipt or the signature panel of the credit card machine. It is good to keep a copy of the receipt in your records to track your expenses. Having the receipt also gives you an opportunity to change the products that you bought, in case they are defective.
If used wisely and responsibly, a credit card can prove to be a very helpful financial tool for you. Regular on-time payments can help in boosting your credit rating, and offer you rewards too. To keep your credit score and wallet healthy, try to stay under 30% of your credit limit every month.
If you make credit card purchases online, then enter your credit card details on secured websites only. To identify a page as secured, try to find a lock symbol on it. All secured websites start with “https” instead of “http”.
Now your doubts about how to use a credit card must have been cleared. So go and apply for one, if you feel that you need it. With a credit card, you will no more need to think before buying something. Just keep paying it off on time and you will never fall in any problematic situation. If you already aware of ways to use a credit card responsibly, then you really shouldn’t use your debit card for anything other than taking out cash from your bank. If you use a credit card responsibly, then it can be a very rewarding initiative for you. Work on you spending habits and stay away from overspending. Give preference to needs more than wants. There are thousands of benefits that await those who choose to responsibly use their credit cards.