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Credit Cards?
Credit Cards?
Could you please provide me with information about the way credit cards work? Do they build up your credit and if so, how? Is it true that one could buy things with credit cards and pay within a certain grace period and not have to pay any interest? This way only one's credit would improve and one would never have to pay more than if one would have purchased items with cash. Thank you for your responses.
Answers:
theoriginalgodwynn: Credit card companies make money off of your purchase (Visa is 1.9% of the payment, not coming out of your pocket but taken off of the store where you bought the item from). Yes, generally if you pay within one pay period you are charged no interest.
2008-02-04 16:29:00
2008-02-04 16:29:00
Chosen Answer
Serge M: Yes credit cards can be a great convenience and can build up your credit if used as you describe. There are some variations but most cards do not have an annual fee, and if you pay the monthly bill in full and on time, you avoid paying interest. In effect, you get free credit and build your credit history of reliable payments. You should not charge more than about 30-35% of the credit limit on a card. chargin close to the maximum amount of credit is viewed negatively in computing your credit score.
2008-02-04 16:33:07
Serge M: Yes credit cards can be a great convenience and can build up your credit if used as you describe. There are some variations but most cards do not have an annual fee, and if you pay the monthly bill in full and on time, you avoid paying interest. In effect, you get free credit and build your credit history of reliable payments. You should not charge more than about 30-35% of the credit limit on a card. chargin close to the maximum amount of credit is viewed negatively in computing your credit score.
2008-02-04 16:33:07