How Do Credit Cards Work?
At River City Hyundai, we get a lot of questions about credit—including how to find your next credit card, how to improve your credit score, whether you can get auto insurance with a credit card, and if you can get credit cards for bad credit. Learn about how credit cards work with River City Hyundai in Edmonton, AB.
Just like any kind of loan you take out, credit cards allow Fort McMurray folks to borrow money by charging interest on the amount of money borrowed. This means you are being charged a percentage of the amount borrowed by the lender. For most credit cards, it’s a good idea to keep track of your interest rate, because it can change from time to time.
2. Grace Period
For most credit cards, you won’t have to worry about paying interest as long as you pay off the balance within 21 or 30 days of the date you spent money on your card.
3. Minimum Payments
Within the terms and conditions of your credit card, you’ll note that there will be minimum payments on your credit card, should you still have a balance after the grace period. It’s important to understand that the minimum payment is usually structured to pay off mostly interest and only a small amount of the principle, so it’s a good idea to pay more than the minimum if you’re able to.
4. Delinquent Payments
If you don’t pay at least the minimum required amount for the month, it can have a negative impact on your credit score, affecting your ability to take out low-interest loans in the future and resulting in late fees. Frequent delinquent payments is a surefire way to damage your credit.
5. Cash Advances
If you’re strapped for money, you can use your credit card to take out some cash from your credit line. This comes with a high-interest rate, though, so it’s best to avoid making this a habit.
Get the Credit You Need Near Edmonton
Get the advice you need to be responsible with your credit card, and count on the team at River City Hyundai for all your lending needs near Fort McMurray. If you have any questions as to how to use your credit card to improve your score, feel free to give us a call!