Credit Basics

Can a credit card company raise my interest rate without letting me know?

Yes, credit card companies can raise your interest rate and there is no telling how high a certain company will raise the rate. You can avoid this high interest hike by making timely payments every month, even if it is just the minimum payment. Some credit card companies will even raise your interest rate if you are late with other bills besides your credit card bill.

What is credit?

Credit is the reputation you have earned for paying your bills on time that makes it possible for you to receive loans, etc. with the understanding that you will pay for them later.

Why is credit important?

If you are looking for a loan, credit card, or low interest rates, having good credit will increase your chances of getting one of these. If you have credit problems, it may be hard to acquire a loan when you need it the most.

How does a balance transfer work?

If you have a balance on one credit card and then you receive another credit card, you may move the balance from the first card to the second. The issuer of the second card then pays the first card off and charges you the amount of the outstanding balance.

What is a grace period?

A grace period is the amount of time after a due date of a bill that may pass before late fees are applied. Grace periods are usually 10-25 days and may depend on the company.