Credit card is a plastic card issued by a Credit Card provider to a person. The authority giving a credit card assures the person, that it pledges to lend him/her a money amount (equal to the limit of credit card) to make payments.
In fact, it is reduced from the amount which may be lent by the issuer of a credit card and interest rates are charged on the whole sum used by the person in a way of ‘revolving credit’.
All the operations, including calculating the min sum due and the interest rate, the period after which rates of interest will be taken etc. are mentioned in the agreement between the issuer of the credit card and the person.
Credit cards are extremely popular nowadays. This idea is good for those who like to buy things, but often don’t have the needed sum available on them. The service provides the money which can be repaid later either by paying back the whole sum or by portions.
Dependent on the way the holder spends money from the credit card when he has a negative balance, owning a credit card can lead to further financial problems.
Many people who have several credit cards can find themselves in debt due to spending the cash available.
Thus, it is obvious that owning a credit card has some advantages and disadvantages.