Credit card

“Credit card authorizing purchase of goods on credit”. Credit cards are innovative instruments in the area of financial services offered by commercial banks.

By definition, spending with a credit card means you are spending money you don’t have – it’s a loan. Many people use credit cards and pay off their balances each month in full, incurring no fees or interest. Others carry balances from month to month, meaning they are paying interest on money they have already spent and could be charged a fee for missing a payment.

If large, unexpected or emergency purchases arise, a credit card may help to manage the cost. A credit card is a form of unsecured, short-term borrowing. Unlike many loans, your assets won’t be used as security against your credit card debt.

But you will generally need to have a good credit score to be successful in your application for a credit card – and certainly when applying for those cards that offer the best terms.

Some credit cards give you the chance to earn cash back and rewards whenever you use them. Certain others can be used to help build a better credit score. Although credit cards carry a signature strip, transactions made in person are

usually authorized using a personal identification number or PIN.

Using a credit card

You can use a credit card to pay for all sorts of purchases – whether goods or services – made in person, by phone or online. All but the smallest businesses tend to be set up to take payment by credit card, although not all credit card types are equally widely accepted. Look for the logos when you shop to see where you can pay using your credit card type. When paying in store, you will be asked to insert your credit card into a card reader to make your purchase. Or the sales assistant may do this for you, in front of you. To protect your card from being used fraudulently, it’s important not to let it out of your sight. Restaurants should bring the card reader to your table.

The card reader will prompt you to check the total amount of the transaction. Once you have accepted this, you will be asked to enter your PIN. (In a restaurant, there may be another step in between, to allow you to add a gratuity.) Keeping the screen covered while you do so can help to ensure the security of your credit card. When making purchases online or over the phone,