This is how Credit Cards work
Vijay Choudhari
Project Leader POS & Payment Systems | Expert in Fuel, ATM, EMV, Card & Loyalty Programs | Certified in PMP, Agile, Scrum,Azure ISTQB | MCA |USA,Canada Visa |
Statement & Balance
A monthly statement is generated with details of your transactions and balance. If you do not pay off the outstanding balance in full every month, then interest will be charged on the remaining amount.
Minimum Due
You are required to pay a minimum due every month which is usually 5% of the outstanding balance. As long as you pay this minimal amount every month, your card will work just fine.
Defined Limit
A Credit Card lets you spend money on credit. You can spend up to a pre-set credit limit (defined by the bank).
No Interest
If you pay off the outstanding balance on your card before the due date IN FULL, no interest will be charged (except for cash withdrawals, where interest is usually charged on a daily basis from the day you take your cash).