what is credit card? how to use it? how safe it is?

Answer 1

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Answer 2

Credit means to borrow some money. And credit card is use to borrow some money from your bank. And it has many advantages and uses. You can use your credit card world widely for shopping purpose.

The safety of your credit card is in your hands. Don't give your credit card details directly to anyone. If you want to use for shopping then join some safe money gateway via your credit card. Like Paypal, Storm pay etc.

You can also use your Credit card in ATM machines to withdraw cash. But note you will have to pay back that cash to your bank within the limited time period.
If you never ever pay the borrowed amount to your bank then you will be banned world widely. And you will no more able to issue any other bank's credit card.

Answer 3

Credit Card Basics Understanding Five Main Credit Card Terms
By: Joseph Kenny
Here is a bit of information to start you along the learning road! You can also use this web site to help you achieve your goals!

Answer 4

A credit card is a line of credit, an unsecured loan and an open loan, that is available to you at anytime. You can charge up to your credit card limit on any purchase. People have even bought cars and houses on their credit card.

Responsible use of a credit card sets your credit rating. You need a strong credit rating to be eligible for a loan to buy a house. Also employers can look at your credit rating. A poor one is the sign of an irresponsible person, and that could cost you the job.

It is also the worst loan you can get with the highest fees and interest. A practice mentioned in the bible as usury. Most credit cards are tied to the Prime Interest Rate, the interest rate given to the best companies that apply for a loan. If you are a good credit risk, if you have a good credit rating, then the credit card companies will offer you a credit rate closer to the Prime Interest Rate. I have seen credit card interest rates well over 20% and some as low as 10%. Still these loans are at a much higher rate than a normal loan. If you pay off your entire balance at the due date then you are not charged an interest fee. If you miss it though you have to pay interest. If you don’t pay your minimum balance then you get late charges, and if you exceed your credit limit then you get charged for that as well. The kicker is that these charges go on your credit card so you will have to pay interest on them, unless you pay them all off each month.

There are advantages to having a credit card, especially in an emergency. They are also good because they give you an itemized list of your expenses. If you are a business this can be a good record from which to claim deductions. Of course a debt card will do the same thing, and it doesn’t cost you anything to have or use.

Debt Cards are tied directly to your checking account; they are just universally accepted ATM cards. Using a debt card is better, because you don’t have to pay a high interest rate on your purchases, you also don’t face the major temptation of a credit card.

The problem with a credit card is that all the fees and any charges keep adding up. You have to pay your interest charges on the entire balance. It is very easy to go into the hole this way and that can ruin your life. If you don’t pay off your credit card balance soon, especially if you only pay the minimum fee, then the balance keeps increasing; even if you don’t use the card anymore the balance keeps increasing. There is a dirty little secret that the credit card companies don’t tell you about. They base the interest rate on a yearly figure: your APR (annual percentage rating), but they charge you each month.

Lets look at a credit card with a 200$ balance at a really low rate of 12% APR. You make more than the minimum payment, but you end up leaving a $200 balance on the credit card each month. That means you have to pay 1% interest each month. So in January you pay $200.10, in February you pay $202.10, in March you pay $204.12 then in April you pay $206.16. As you see the price keeps adding up, and that is with a low balance, at a low interest rate. It is easy to see how this keeps adding up, and pretty quickly at that. Now imagine if you have an average APR of 19% and you miss a payment or two, the money you owe starts to climb real fast. That’s why every finical advisor, worth 2 cents, will tell you that the best advice they can give you is to pay off all your credit cards first.

A credit card is safe to use. Visa offers an additional warrantee on everything you buy on their credit card. They are practically universally accepted worldwide and they can easily handle payments in foreign currencies. If your card is lost or stolen then you are not held liable for any fraudulent purchases made with your card, provided you quickly report it missing to the credit card company. However, it has the largest interest rates of any loan. Since it is a loan; it has a negative value to your personal wealth, and the fees and interest adds up quickly.

A credit card is safe to have, and having one is a good thing, but it can easily get out of hand. As long as you pay off your balance each month then you are using a credit card responsibility. You have to be careful though, because it is a temptation to use, and it is so easy to get into trouble with it.

Answer 5

credit card is a card where you can buy things. you can get ca$h, but each month you have to pay back certain amount to your credit card company. it's easy to use it. you can use it in most of the grocery stores/shopping mall, blah blah (anywhere that takes credit card-especially the ones that you have: discover, visa, mastercard, blah blah) it's safe if you keep the secret pin number to yourself.. it's kinda not safe if you use your credit card & buy items online.. cuz chances are people will try to hack.. blah blah.. good luck!!

Answer 6

If you don't know what a credit card is, you are probably too young to have one.

Answer 7

credit cards are a rip off, they just charge you a bunch of fees so you can have money, if someone got a hold of your card they can charge it up in your name, and then it screws up your credit if you are late or over the limit

Answer 8

My god !! you do not have to write a newel to explain this. My friend ,you know what credit is.barrow money.you can only do it if some one trust u!! how 2 use it ? u know it when u can get it!!
how safe? Like a condom !! Enjoy !!!!!!!!

Answer 9

A credit card is basically a loan on a piece of plastic. It is safe.

Shopping from your home has be come a fast and easy way to get good deals and a wider selection of merchandise but it is important to keep your credit card number and expiry information safe.

It's likely that your credit card has been issued by one of the main banks in America. As part of the research for this Tips Sheet, we have been unable to find any information regarding their own specific advice on how to safely shop online with your credit card.

Internet Shopping Guarantee

A further notable omission from many of the major credit card issues in this country was the lack of an "Internet Shopping Guarantee". We're willing to be corrected on this matter, but for such an important protection to have on a credit card these days, you'd think that if these credit card providers did have such protection on offer that they'd advertise it.

Take, for example, the Egg Card, available in the UK. They tell us that "If you're worried about shopping online, don't be. The Egg Card comes with its own Internet guarantee, so whenever you shop with your Egg Card online, we guarantee you'll be covered against any fraudulent transactions carried out without your consent, whatever the amount."

The closest we could find in America to such a guarantee is provided by MBNA, who state on their website "There is no liability or excess to pay for theft, loss or fraudulent Internet use - as long as you tell us as soon as your card cannot be found or you notice any unusual transactions on your account." However, on closer inspection, this is standard practice when you loose your card irrespective of whether it's used on the internet or in the local supermarket to fraudulently buy beer. So, big deal!!!

So, when using your credit card online, be aware of the following points:-

Reputable Sites - You should only shop and use your credit card on well known sites - either through their online reputation (Amazon, CD Wow, or eBay, etc.) or through their reputation as regular high-street shop (Tesco, Easons, or Arnotts, etc.). Unavailable as far as we can find out in America, but the UK Which? magazine provides a listing of trusted online UK retailers - something also available from an organisation called TrustUK.

Phone or e-Mail follow ups - If you do shop online, and you are contacted for any reason about any kind of problem, do not provide your credit card number via e-mail or to a telephone sales person. Should any such problems arise, the website should have a secure area where changes can be made to fix any problems.

Single "online" credit card - It is sometimes recommended that you have a single credit card, with a relatively low limit, that is only used when purchasing online. The low limit reduces your exposure to online credit card fraud, and your bills will be clearer because of less transactions thereby highlighting any abnormal usage.

Check your credit card bills - Whether you have one credit card, or multiple cards, you should always, always, check your bills each month when you receive them. This is your responsibility as a consumer.

Privacy and Security - You should always confirm before you submit any personal or financial details that you have been brought to a secure part of the retailers web site. You can normally tell this by a padlock sign at the bottom of your browser window, and the web address should begin with https. When making an online purchase, you should always print off your receipt and note the time of purchase and the details you submitted. These will be important if any follow ups are necessary. Finally, for convenience purposes, many sites will offer to "store" your personal details. For extra security, you may chose not to avail of this offer.

Report Stolen or Lost Cards - This is an obvious statement. However, given that it is becoming more prevalent for stolen credit cards to be used on the web, where signatures are not required, you should make sure you report lost or stolen cards immediately. Credit card companies 'time-stamp' such reports on your accounts, so that any purchases made after you make your report, won't be passed on to you. They are fully entitled to pass on the cost of any purchases to you before that time-stamp.

Saved Credit Card Details - Many companies offer you the opportunity to store your credit card details on their site to make it easier to make purchases in future. To prevent the possibility of having hackers steal your credit card details from that site, you should opt out of availing of this facility.

Credit Card Receipts - Don't discard credit card receipts as these can provide enough information to fraudsters to complete fraudulent credit transactions. This is why sometimes now sites as for the 3-digit number on the back of your card as well - this is only on the card and not reproduced on receipts. This so-called "Card-not-present fraud", committed over the internet, fax, telephone or by mail order, has increased rapidly.

Always Keep Records - You should always keep confirmation e-mails, and probably more importantly, screen printouts of your order confirmation details, including what you've ordered, and confirmation numbers. While acting as a receipt and a reminder, usually these pages also provide telephone contact numbers should any queries arise. Make sure you have both the e-mail address and the terrestrial address and telephone number of the company you've ordered from - if you don't, or they're not readily available, you should think twice about making your purchase.

Do not use Proxy Servers - Some online service providers, such as AOL or Prodigy, use a device called a proxy server. Proxy servers save copies of sites on their server rather than connecting users to the Internet or the specific site requested. In most cases this works fine. Using a proxy server might sometimes prevent your purchasing transaction from going through correctly, and cause errors to be generated. This could cause your credit card details to remain "hanging in cyberspace", or may cause you to make multiple submissions to try to complete the transaction. If you do not know if you are accessing the Internet through using a proxy server, contact your Internet service provider.

Answer 10

A credit card system is a type of retail transaction settlement and credit system, named after the small plastic card issued to users of the system. A credit card is different from a debit card in that the credit card issuer lends the consumer money rather than having the money removed from an account. It is also different from a charge card (though this name is sometimes used by the public to describe credit cards) in that charge cards require that the balance be paid in full each month. In contrast, a credit card allows the consumer to 'revolve' their balance, at the cost of having interest charged. Most credit cards are the same shape and size, as specified by the ISO 7810 standard.

How its work.
A user is issued a credit card after an account has been approved by the credit provider (often a general bank, but sometimes a captive bank created to issue a particular brand of credit card, such as American Express Centurion Bank), with which they will be able to make purchases from merchants accepting that credit card up to a preestablished credit limit.

When a purchase is made, the credit card user agrees to pay the card issuer. Originally the user would indicate his/her consent to pay, by signing a receipt with a record of the card details and indicating the amount to be paid, but many merchants now accept verbal authorizations via telephone and electronic authorization using the Internet.

Electronic verification systems allow merchants (using a strip of magnetized material on the card holding information in a similar manner to magnetic tape or a floppy disk) to verify that the card is valid and the credit card customer has sufficient credit to cover the purchase in a few seconds, allowing the verification to happen at time of purchase. Other variations of verification systems are used by ecommerce merchants to determine if the user's account is valid and able to accept the charge.

Each month, the credit card user is sent a statement indicating the purchases undertaken with the card, and the total amount owed. The cardholder must then pay a minimum proportion of the bill by a due date, and may choose to pay the entire amount owed or more. The credit provider charges interest on the amount owed (typically at a much higher rate than most other forms of debt). Some financial institutions can arrange for automatic payments to be deducted from the user's accounts.

Credit card issuers usually waive interest charges if the balance is paid in full each month, but typically will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is not paid.

For example, if a user had a $1,000. outstanding balance for purchases and pays the entire $1,000. there would be no interest charged. If, however, even $1.00 of the total balance remained unpaid, interest would be charged on the full $1,000 from the date of purchase until the payment is received. The precise manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement. (See The TD Gold Travel Visa Cardholder Agreement Retrieved January 3, 2006)

The credit card may serve as a form of revolving credit, or the user may choose to apply any payments toward recent rather than previous debt. Interest rates can vary considerably from card to card, and the interest rate on a particular card may jump dramatically if the card user is late with a payment on that card or any other credit instrument. As the rates and terms vary, services have been set up allowing users to calculate savings available by switching cards, which can be considerable if there is a large outstanding balance (see external links for some on-line services).

Because profit margins in the credit card industry can be quite high, credit providers often offer incentives such as frequent flier miles, gift certificates, or cash back (typically 1 percent) to try to attract customers to their program.

Low interest credit cards or even 0% interest credit cards are available. The only downside to consumers is that the period of low interest credit cards is limited to a fixed term, usually between 6 and 12 months. However, services are available which alert credit card holders when their low interest period is due to expire. Most such services charge a monthly or annual fee.

The merchant's side
For merchants, a credit card transaction is often more secure than other forms of payment, such as cheques, because the issuing bank commits to pay the merchant the moment the transaction is verified. The bank charges a commission (Interchanging Fee), to the merchant for this service and there may be a certain delay before the agreed payment is received by the merchant. In addition, a merchant may be penalized or have their ability to receive payment using that credit card restricted if there are too many cancellations or reversals of charges.

Secured credit cards
A secured credit card is a type of credit card secured by a deposit account owned by the cardholder. Typically, the cardholder must deposit between 100% and 200% of the total amount of credit desired. Thus if the cardholder puts down $1000, he or she will be given credit in the range of $500–$1000. This deposit is held in a special savings account.

The cardholder of a secured credit card is still expected to make regular payments, as he or she would with a regular credit card, but should he or she default on a payment, the card issuer has the option of recovering the cost of the purchases paid to the merchants out of the deposit.

Often, though, if the cardholder does not make the required payment, many issuers of secured credit cards consider that the account must be paid before the security is released instead of using the security to pay the balance due. The card is not cancelled, the balance is not set off the deposit, and interest continues to accumulate on the unpaid balance for considerable periods of time. In some cases the total charges may far exceed the original deposit and the cardholder not only loses their deposit but is left with an additional debt.

Most of these conditions are usually described in a cardholder agreement which the cardholder signs when their account is opened.

Secured credit cards are an option to allow a person with a poor credit history or no credit history to have a credit card which might not otherwise be available. They are often offered as a means of rebuilding one's credit. Secured credit cards are available with both Visa and MasterCard logos on them. Fees and service charges for secured credit cards often exceed those charged for ordinary non-secured credit cards.

Features
As well as convenient, accessible credit, the cards offer consumers an easy way to track expenses, which is necessary both for monitoring personal expenditures and the tracking of work-related expenses for taxation and reimbursement purposes. They have now spread worldwide, and are offered in a huge variety of permutations with differing credit limits, repayment arrangements such as automatic payment from a personal bank account (some cards offer interest-free periods, while others do not but compensate with much lower interest rates), and other perks (such as rewards schemes in which points earned by purchasing goods with the card can be redeemed for further goods and services or credit card cashback).

Some countries such as the United States and the United Kingdom limit the amount for which a consumer can be held liable due to fraudulent transactions as a result of a consumer's credit card being lost or stolen.