Credit Card is essentially a bank loan, in which you can use for purchases as long as that credit card is accepted from the seller. You get a nice plastic or metal card that you can scan or swipe to purchase from online or in person needs.

Credit Limit This is the amount the bank has agreed to make as your maximum amount available for spending or making purchases. A secure credit card is typically $200 credit limit. Thereafter your credit limit is based on your income, lets say you make $50,000 a year. You may get anywhere from $1,500 to $10,000 credit limit for a single card. The amount will grow as you earn more income per year, however that doesn't mean you will be spending this much! Try to think of this as a credit score helper, when your total Credit Limit is below 10% it will contribute to a higher credit score and make you look in control of your finances. A credit limit does not mean you have to spend that amount, we need to be smart here and spend what we can afford to pay off. The method provided below is an example of smart spending and responsible credit card ownership.

Monthly Statement You will get a monthly due date, for example it could be May 15th. On May 15th, you will have to make a monthly payment if you have made purchases on that card and if the card has no balance, then you do not need to make a payment. Yes, purchases you make are then considered debt, until paid off. You can review your purchases on your monthly statement and see if it all looks accurate, as in you did purchase everything on it. If not, then you should dispute it and someone may have stolen your credit card information.

Credit Card Theft May occur in 1 of 2 ways. First, you notice charges on your statement that you never went to purchase and know it wasn't you. The thief has somehow taken and used your credit card information, while you are still in possession of your physical card. Second, you lost your physical card and notice charges being made on the account. This is a physical card theft. When either 1 or 2 theft happens, you need to Freeze the card on your account page or with your bank and request new cards be mailed to you. You will also need to dispute the charges as it wasn't you who made those purchases. Credit card companies will honor your dispute if you are not abusing the system and trying to dispute every purchase you make. As long as your being honest, I have personally had to rarely dispute a charge and when I do it is always granted to me. This is because I try to stay honest and only dispute when I was charged incorrectly. I have yet to personally experience a credit card theft, knock on wood.

Automatic Payments Can be turned on if you go to your credit card or bank website and sign into your account. You can then typically select minimum payment, custom amount or pay statement balance in full each month automatically. You will need a bank routing number and account number ready to input, this will be withdrawn from that account each month automatically. You can setup email alerts for notifications of the payment going through, so you don't have to check it manually each month. Although, it is responsible to also check it at least once a month.

Interest Rate or APR % This is what most people are scared of when they think of credit cards, however you will learn on this page how to never accrue interest and get free discounts on your purchases. Interest rate or APR % is an added fee, along with your monthly minimum payment. Let's say your minimum payment is $41 and your total balance remaining is $2000. Interest % will be added to the total remaining balance and then added on top of that minimum payment. This is how credit card companies make so much money and people get locked into credit card debt. Your goal should be to NEVER pay interest on a credit card.

Balance Transfer This is what it sounds like, it is a transfer of part or all of the balance on one credit card and moving it to another card. This is helpful for example on a card that is going to gain interest on the next billing cycle and transferring the balance to a card with a zero-interest period.

Rewards Generally come in the form of points on a credit card, you can then redeem these points as Statement Credit or a Gift Card and so forth. The general rule for free money is to apply it as statement credit, this will lower your monthly bill. This is how we get use credit cards to get a discount on big purchases, such as furniture for a new apartment.

Reward Cards Range from Airplane mileage, shopping points or cash back up to 5% of your purchase on select categories or a Spending reward.

0% APR Introductory Period When opening a new credit card, they will typically come with a 0% interest/APR for 12-18 months. This means that you can make the minimum payments and use it as a loan if you make a big purchase and pay it off over time. Once you reach those 12-18 months, interest will start adding fees to your monthly statement bill. In order to bypass or remove interest rate completely, pay off the balance in full if you can OR do a balance transfer to another card a month before your interest rate will begin.