Credit Cards

Definition

A payment card allowing borrowing from the issuer. Requires repayment with possible interest.

Reasons to Use

• Convenience
• Build credit
• Rewards
• Emergency funds

Reasons to Avoid

• Risk of overspending
• Debt
• Interest charges

Types of Credit Cards

• Standard: Basic features, possible annual fees
• Rewards: Points, cash back, travel benefits
• Secured: Requires deposit, for bad/no credit
• Student: Lower limits/rates, for students
• Business: For business expenses, higher limits
• Store: Issued by retailers, usable only at specific stores

Choosing a Card

• APR/Interest Rate
• Annual Fee
• Rewards and Perks
• Credit Limit
• Other Fees and Penalties

Schumer Box

A mandatory information table in U.S. credit card materials. Includes:

• APR
• Fees
• Grace period
• Penalties

Benefits

• Build credit score
• Earn rewards
• Emergency funding
• Convenience
• Purchase protection

Drawbacks

• High interest rates
• Potential debt
• Various fees
• Risk of overspending