How Credit Cards Work ?

How Credit Cards Work
Credit cards are the most common type of loan applied for and used by people. Credit cards are one tool in managing the finances that gives you easy if managed properly. Know and understand the terms and conditions apply. If you already know how it works, surely you can control your finances better.

Credit Limit
If your credit card application is approved, the credit card issuer will determine the credit limit of your card. Credit limit is the maximum amount that you can use in dealing with the use of the card. Each credit card issuers have different policies in determining the credit limit on each credit card issued.

The things that affect the determination of credit limits, among others:

- Monthly Income
- Current loans (other than credit cards, car loans, etc.)
- Long lived at the address now
- Home ownership
- The number of credit card application has ever done
- The number of credits required

You can request your credit card issuer to raise your credit card limit.
The decision to raise the credit limit depending on your overall financial situation. You may be able to get a higher credit limit if the percentage use of the available credit limit shows you need a higher credit limit, always pay on time, revenue increases, and / or you always pay more than the minimum payment or pay the full bill.

Interest

Interest will be charged if the cardholder fails to pay in full before the maturity of the bills each month.

There are several ways to calculate interest, generally using the methods below:

Average Daily Balance

Many credit card companies use this method. Credit card issuer you add up the entire balance every day during the billing period, and dividing by the number of days of the billing period. Then, multiplied by the prevailing interest rate.
To find out how to calculate interest rate used your credit card issuer, you can see the simulation calculation of interest through the website your credit card issuing bank.

Cash Advance

Cash withdrawals are easy, but can also be expensive. Make sure you understand its requirements before you withdraw cash.

Cash withdrawal is not an ordinary credit bills are short-term transactions that you have to pay immediately. You are usually required to pay a transaction fee (up to 5% of the amount withdrawn) on the outside of other costs.

Interest rates for cash withdrawals are generally higher than normal spending rate. Cash withdrawals are not encouraged to pay their daily needs, other needs that are not urgent, or pay credit card bills because of high cost.

Only a portion of the total usage limit (credit limit) from your credit card are allocated can be used for cash withdrawals. This amount is shown on your monthly bill.

TIPS

How to cash withdrawal with credit card

In Bank:
You can get cash at any bank, including outside the country, using credit cards.
Through ATMs:
With a credit card and PIN, you can get cash at ATMs anywhere in the world.