What is a Credit Card

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What is a Credit Card

Credit card is a financial instrument issued by banks, which has a pre-set credit limit, which helps you to do cashless transactions. The card issuer determines the credit limit based on your credit score, credit history and your income.

Once the credit card bill is received, you can repay the amount spent within a fixed repayment period without any interest. After this grace period, interest is charged on the balance.

The main difference between a credit card and a debit card is that when you swipe a debit card, money is deducted from your bank account. In case of credit cards, the money is taken from your credit limit.

You can swipe a credit card to pay online or offline for almost all products and services. After applying for a credit card and starting to use it, ensure that the amount borrowed or used by you is repaid within the stipulated time frame to avoid penal charges. Your credit card details are stored securely with the issuer. To avoid fraud, don’t share your credit card information with anyone.

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