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Basic Features of Credit Card

Under the category of the credit card, there are several other types. These credit cards are further designed with special functions and for specific purposes. A standard card will offer you the simple function of borrowing funds at a fixed interest rate and fixed repayment tenure. Alternatively, speciality cards such as the balance transfer credit cards come equipped with introductory interest rates on balance transfers. Reward cards allow the applicant to collect reward points on any purchase they make. There are also such as the retail and premium ones that are used only for specific functions and purchases.

Credit Limit

Each one is equipped with a credit limit. This credit limit is the maximum amount a owner can charge to the card. This would include features such as making purchasing, balance transfers, cash advances, finance charges and fees amongst many others. If you ever charge any amount on over the credit limit, you will be charged extra fees.


The balance on your card indicates how much of purchases or expenditures have been charged to you. It would also include the additional fees. A high credit card balance would result in lower credit. Thus, any additional purchases will not be allowed unless you have a charge card or no – limit credit card. A high balance allows you to use more credit, while reducing your credit score.


The annual percentage rate also known as APR is the interest rate that is applied to the balance when it is carried beyond the grace period. Different types of balance would have different APR’s. Normally, cards such as balance transfers and cash advanced cards would possess high APR’s. Your APR’s change depending on how late you pay off the dues on the card to the bank.

Grace Period

Each one has a fixed tenure, wherein the card owner must repay the borrowed funds within that given time period. This period, also known as the grace period, is often interest free. Once this period is passed, and you have not paid your dues, interest will charged on the unpaid amount. If you carry the balance from the previous month, you may not have the grace period for any new purchases.

Incentives and Rewards

Some banks offer rewards and incentives for using their credit card. These rewards come in several different forms such as cash back, points to redeem, and discounts. A card owner can use these cards to collect these incentives and rewards for better services.