How do credit cards work?

A credit card is a plastic card used in stores and online, to pay for goods or services. Effectively, credit cards work by lending you money. A credit card can be used in many other ways, such as at an ATM machine to withdraw cash advances or to transfer balances between accounts using a balance transfer credit card.

How to use a credit card

When purchasing an item by credit card the cardholder agrees to pay by signing a receipt or by entering a personal identification number (PIN). Issued by banks, finance companies, clubs and supermarkets, your card will come with a credit limit (the amount available you have to spend) based on your circumstances.

Credit card payments

After receiving your credit card the provider will send you a monthly statement detailing all your transactions. To avoid interest charges, repay the balance in full by the given deadline. However, if you choose to make at least the minimum payment you will have to pay interest and it will take you longer to repay the outstanding balance. Interest rates vary, but they can be competitive

Understanding credit cards

Understanding credit cards can be the difference between financial self-assurance and financial insecurity. Learn how to use a credit card to your advantage and use it wisely – it can be a very efficient tool in managing your money. This could mean free, short-term credit if you always pay your balance in full by the due date on your monthly credit card statement. Credit cards are a flexible borrowing facility that protect against fraud and provide a safe, convenient option for purchasing over the internet, phone or by mail order in countless places worldwide. With an aqua card and the right strategy you could create – or improve - your credit rating in a manner or months.