credit card

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A means of payment backed by a financial institution in which the cardholder has a line of credit.

It is a form of financing so, therefore, the user must assume the obligation to repay the amount drawn and the interests, bank fees and expenses set. The user has limits on the amount that can be charged according to the risk policy of the company and his personal characteristics and financial solvency. Generally it is not required to pay the full amount each month however accumulates interest on the balance financed.

The amount payable varies between a minimum and the total spent, but the balance which is not paid accumulates interests that the holder must pay in the following payments. If payment is made of the total balance, no interest is paid. As for the advantages of the credit card would be the flexibility for the user who has the ability to purchase with this type of card, even not having balance in his bank account.

The credit card allows us to have a maximum amount set in advance by the bank, which is called credit, and we will have to pay the bank the following month, but only the amount consumed. And one of the big advantages is that it allows cash withdrawals from ATMs at any time.