Credit Cards

It's Real Money

Using a credit card is like taking out a loan. Credit card companies allow customers to borrow their money, but everything must be paid back in full and on time by the end of the month. Using a credit card is like paying for the convenience of using money you do not have, but the card company can charge interest and limit your spending.

What Happens If I Don’t Pay?

Unpaid credit card balances count as a debt that will grow by accumulating interest. Not paying your credit card bills will adversely affect your credit score (see below). In short, you face many immediate, lasting, and significant consequences if you do not pay off your credit card debt.

Credit Cards vs. Debit Cards

Debit Cards:

  • Allow you to use money directly from your checking account
  • Have no interest rates or finance charges
  • Make it impossible to spend more than you have
  • Come with most checking accounts

Credit Cards:

  • Can help you make very large purchases that would otherwise be impossible
  • Can only be obtained by applying for one
  • Require an investigation into your credit history to check your eligibility

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Fun Facts:

  • The first general credit cards had a limit of $300 and were made of paper.
  • All credit cards in the United States stacked up would form a tower almost 300 miles high.
  • There are two credit cards for every member of the population of the United States.
  • American Express’ famous “Black Card” is actually called “The Centurion Card.” Since AMEX never had a trademark for Black Card, Visa got a trademark on it and is now rolling out advertising campaigns for its own Black Card.
  • The reason credit cards expire is because the magnetic strip gets a lot of abuse and needs to be replaced. A magnetic strip is good for only about three to four years of swiping.