In the vast landscape of personal finance, a credit card is a dual-edged sword. It offers the flexibility of buying now and paying later, coupled with the potential for rewards. Conversely, incorrect use can lead to significant debt. With an understanding of the core principles, you can use these powerful financial tools to your advantage.
Understanding Credit Cards
Credit cards, essentially, are lines of credit extended by financial institutions. Upon approval, the issuer sets a limit that reflects your creditworthiness, offering an agreed amount for borrowing. However, the potential for credit card dangers lies in their misuse.