Credit card

A credit card is a payment card that allows the cardholder to borrow money from a financial institution up to a certain limit in order to make purchases. The cardholder can then repay the borrowed amount, with interest, over time.

Credit cards are widely used for both online and in-person purchases, and they offer a convenient way to access credit without having to carry cash or write a check. They also offer a variety of features and benefits, such as cash back rewards, travel perks, and purchase protection.

Credit cards typically come with a credit limit, which is the maximum amount that can be borrowed on the card. The cardholder can use the card to make purchases up to the credit limit, and then must make payments on the balance over time, typically on a monthly basis.

Credit cards also come with interest rates, which can vary depending on the card issuer and the cardholder's credit history. If the cardholder carries a balance on the card, interest will be charged on the outstanding balance, increasing the amount that must be repaid.

Credit cards also offer a variety of fees, including annual fees, late payment fees, balance transfer fees, and cash advance fees. It's important to carefully review the terms and conditions of a credit card before applying in order to understand the fees, interest rates, and other costs associated with the card.

Overall, credit cards can be a useful tool for accessing credit and making purchases, but it's important to use them responsibly and to carefully manage the associated costs and fees.

In addition to their convenience and accessibility, credit cards also offer a number of benefits and features that can be attractive to cardholders. Here are some of the most common credit card features and benefits:

Rewards programs: Rewards programs can offer a variety of perks, such as points, miles, or cash back, that can be redeemed for a wide range of rewards. Some examples of credit cards that offer rewards programs include the Chase Sapphire Preferred card, which offers points that can be redeemed for travel, merchandise, and statement credits, and the Blue Cash Preferred card from American Express, which offers cash back rewards for purchases at supermarkets, gas stations, and select department stores.

Sign-up bonuses: Sign-up bonuses can be a great way to earn rewards quickly when you first open a new credit card. For example, the Capital One Venture Rewards card offers 100,000 bonus miles when you spend $20,000 on purchases within the first 12 months of opening the card.

Zero percent introductory APR: Many credit cards offer zero percent introductory APRs for a certain period of time, typically ranging from 6 to 18 months. This can be a great way to save on interest if you need to carry a balance on your card. The Citi Simplicity card, for example, offers a zero percent introductory APR on balance transfers for 18 months.

Purchase protection: Purchase protection can provide coverage for items that are lost, stolen, or damaged within a certain timeframe after purchase. The Chase Sapphire Reserve card, for example, offers purchase protection for up to 120 days after purchase, covering up to $10,000 per claim and $50,000 per account.

Travel benefits: Travel benefits can include a variety of perks, such as airport lounge access, travel insurance, and waived foreign transaction fees. The Platinum Card from American Express, for example, offers access to over 1,200 airport lounges worldwide, travel insurance coverage, and no foreign transaction fees.

Fraud protection: Credit card fraud protection can help protect you against unauthorized purchases and identity theft. Most credit cards offer this protection, but it's important to review your card's specific policies to understand what is covered. For example, the Discover it card offers $0 fraud liability and will monitor your account for unusual activity.

It's important to note that credit card benefits and features can vary widely depending on the specific card and issuer. Before choosing a credit card, it's important to carefully review the terms and conditions to understand what benefits are offered and how they work.