Carrying a credit card is a big responsibility. There are certain rules you need to follow. I wish I had known about these rules when I got my first credit card. I might not have made some of the mistakes I did.
Secured Versus Unsecured Credit Cards
A secured credit card is usually backed by some kind of cash deposit. Think of it as collateral. The risk level is somewhat lower on these types of cards. It is a good option for those who do not have a lot of credit or a bad credit history. An unsecured credit card has more risk to it because there is no cash deposit. It is not backed by anything. The card issuer takes more risk when they approve a customer for one of these cards. When people speak of credit cards they are most likely to be speaking of unsecured credit cards, whether they know it or not. Unsecured cards are not what normally comes to people’s minds when considering credit cards.
The Grace Period
Think of the grace period as a safety net. You get between 21-25 days to pay the amount you owe. The grace period gives you a few extra days. How does it work? For example, your period is between March the 5th and April the 4th. The date you owe your payment on is May the 1st. You can buy anything you want without any interest until May 1st hits. Now, say you do not pay …