Credit cards are a type of open-end credit offered by banks. Credit cards are different from many types of loans as they have a sort of “grace period.” This “grace period” allows the consumer to make the purchases without accumulating interest during that time frame. After the grace period, you must pay interest on the remaining balance on the credit card.
Those who pay off their balance from month to month can borrow as much money as they want, up to their credit limit, without ever paying any interest. Credit cards differ from many other types of loans as they use compound interest. In other words, your interest accumulates interest.
Many credit card companies offer rewards programs such as cashback and travel rewards. Some credit cards have annual fees, and others do not. It is important to research all of the different features of the credit card before applying.
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