Credit
Cards
A credit card is a plastic card that can be used by the holder to
make purchases or obtain cash advances using a line of credit made
available by the card-issuing financial institution. Credit cards
are another form of an unsecured loan, as you are borrowing money
that you will pay back, but you do not have anything (i.e. your home)
secured on it.
Anyone over
18 can apply for a credit card, whether you are working, retired
or self-employed. Your credit limit may depend on your income. Usually
when you first have a credit card, the limit is only a few hundred
pounds, but as you use your card and pay your card, your limit will
probably keep being increased.
Different companies
have different interest rates for their credit cards, a lot of cards
nowadays offer a 0% interest charge for the first few months which
means that you pay no interest on purchases until the term stated
ends. This is a very good selling point for credit cards as sometimes
the interest rates can be high.
Another
benefit of 0% interest credit cards is “balance transfers”.
This means that if you have a credit card with a high interest rate,
you can transfer the balance from this card to new one with an introductory
0% interest rate.
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