These days it’s difficult to live without some type of credit card. There are things that you really can’t even purchase without a credit card, so you really have to have at least one. We all have one or more plastic cards in our wallets and they become a day to day part of life, but really what is a credit card?
Basically a credit card is a revolving line of credit from a bank. They will let you purchase things using the card they issue you up to a predetermined credit limit. At the end of each monthly cycle you receive a statement where you have to make at least the minimum payment but can pay any amount above that up to what you have charged. The next month you can use this card again to make purchases again up to the credit limit less what you haven’t all ready paid off.
Also credit cards are basically cheap unsecured loans. There is not an asset of yours that is protecting the money you owe to the bank. If you for some reason cannot make your payments the bank cannot come and take assets away from you to settle the debt. Basically they can just keep calling and asking for their money and/or put a mark on your credit report. All credit cards (all cheapest unsecured loans) aren’t created equal so shop around for the right deal for you.
Credit cards are also a great way to strengthen your credit score. Every month you have to pay your bill which is giving you a chance to show that you can handle you credit properly twelve times per year per card that you hold. So use the card a little even if you don’t need to and make sure to make at least the minimum payment on time each month and you’ll really start increasing you credit score quickly.