Hey WalletHubbers! Today we’ll talk about credit cards and how they work. Credit cards allow you to borrow money so that you can buy something now and pay for it later. That’s the basic definition, but there’s definitely a lot more that you should know. So let’s go through some of the common questions people have about credit cards. The first question you have to ask yourself is why get a credit card? There are lots of reasons, but let’s boil it down to five big ones. Credit cards allow you to… 1. Build credit, as long as you use them responsibly. 2. Avoid carrying cash, so that protects you from pickpockets, etc. especially if you’re traveling abroad. 3. Earn rewards 4. Allow you to make big ticket purchases that you might not be able to afford all at once. And 5. Shop online – it’s also hard to rent a car or book travel without a credit card. Now that you know why everyone should have a one credit card, let’s talk about who can one. Anyone can be an authorized user on a credit card account, but you have to be at least 18 years old and have enough monthly income to make your monthly bill payments to get your own. And you don’t necessarily need an established credit history to get a credit card. Bad credit doesn’t rule you out here either. At this point, you should have an idea of whether you’re eligible for a credit card. But to build on that, let’s decide what you need to apply for a credit card. You generally need to provide your name, address, date of birth, Social Security number, and annual income. And if you have if you have limited credit history or bad credit, you might need to also place a refundable security deposit of usually around at least $200, that you will get back as long as you close your account in good standing. Before you apply for a credit card, it’s good to have a sense of how much a credit card will cost you. Credit cards usually charge you in terms of annual fees, monthly fees and interest. To avoid interest, pay your bill in full by the due date each month. If you don’t pay it in full, then interest will be charged to you based on your APR. Now that you know about credit card costs, you probably want to know how much you can spend on a credit card. When you’re approved for an account, credit card issuers will also assign you a spending limit. That’s also referred to as a credit limit. And over time, your issuer might increase your credit limit over time to reward good behavior and responsible use. A lot of people also wonder: Where can you use a credit card? If your card has the Visa, American Express, Mastercard or Discover logo, you can probably use it most places. If it does not have such a logo, then you’re actually looking at a store credit card, and you can only use it at the retailer that the logo is affiliated with. For instance, if you have a Macy’s Store Card, you can only use that card at Macy’s. And lastly, how do you get a good credit card, or the best one for you? That question is easy to answer! WalletHub editors’ look at over 1,000 offers and hand pick the best deals for you. So to check out their latest tops picks, click the button right here here.