Credit card as a form of the loan account that can be used continuously within a specified period of time. Practicality and convenience to be the main reason some people use it. In the loan account has been determined that the maximum limit can be used by the credit card customer.

The customers can use these funds continuously provided not reach the maximum limit. Each time a debt repayment of the loan will reduce the balance in the account.  This means that funds which used also increases.

If you have a credit card, you can make purchase in the credit facility limit that has been approved. After spending a credit card, there is grace period that allows you to defer payments. Once the grace period runs out, the bill becomes payable transactions with full repayment of interest and monthly installments. This is also known as revolving credit.

Value of credit card interest, interest calculation, the annual fees and bill payment requirement can vary on each card. Credit cards become problematic when you have no self control in using it. So, make sure you have a strong self-control in order to use credit card.

Advantages:

• No need to carry cash.
• Much easily accepted than cheque.
• There are records of purchase.
• There are points and discount.

Disadvantages:

• Prices of goods may be higher because of credit card fee.
• Can have financial difficulties if you are negligent in monitoring the financial.
• Increased risk of impulsive buying.

Tips:

• Save credit cards for payment by installment system. Do not always rely on payment by credit card.
• Do not buy their daily needs through credit cards because you will be addicted and then get stuck with consumer debt.
• Pay cash for daily basic needs, and save your credit card at home.
• Pay your bills before the due date to avoid interest.
• Pay your bills for the amount of groceries. This means, do not indulge yourself by delaying payment of bills.