Credit cards come with a lot of advantages and disadvantages. If you don't have all of the facts about a credit card there is a chance that it could cost you money. Always pay down your debt whenever possible.
Promotional Rate
One advantage of having a credit card is the fact that you may be able to receive a zero-percent promotional rate for a period of six months or one year when you do a balance transfer. With a zero- percent rate you pay no finance charges for the entire promotional period.
Default Rate
If you miss a payment on your credit-card account, your interest rate could increase to the default rate of 25 percent or more. This rate can vary from card to card.
Points
Some credit cards allow you to accumulate points, from your purchases towards the purchase of airline miles.
Minimum Payment
When you only pay your minimum balance, it can take a long time to pay off your credit-card balance. The longer your balance is outstanding, the more finance charges you pay.
Credit Limit
If you make your payments on time for a year or more, most credit card companies will increase your credit limit. A higher credit limit allows you to make larger purchases.
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