What is credit card?
Most of the people who are new to plastic money or debit card, want to know what exactly a credit card means. What is it used for?
Credit card usage is as simple as borrowing money from a bank without any interest charges for a stipulated amount of time.
Let’s say for example, you are in need of some money urgently. It may be for hospital expenses, or it may be for shopping, or it may be for any other purpose. What will you do?
Usually, anyone will borrow money from friends or from colleagues or from relatives mentioning that, they will return the amount within couple of days or weeks. This will be interest free amount.
The way you borrow money from friends without any interest charges for a short period, you can borrow from banks also. The only difference is, you don’t need to go to bank and ask for money each time you need. Instead, bank will give you a card, which you can use at your convenience. This card is called credit card.
Each credit card will have some credit limit. Credit limit is something one can use the card up to a certain amount. Some credit cards may have 10,000 rupees as credit limit and some may have 10 lakhs as credit limit. It varies from card to card. Anyone can use the credit card up to its credit limit only.
You can use the credit card to shop online, to pay hospital bills, to book flight tickets, to buy groceries, etc.