What is a Credit Card
A credit card from a financial institution definition is a plastic card that is given out by a bank, mall, hotel or an airline which allows the owner to make financial commitments or purchases goods, services based on credit.
When a credit card is issued based on your credit worthiness, it allows the holder to make purchase or pay for goods based on the amount that is accrued to you by your financial institution.
A credit card can either be a plastic card or made from other materials that contains details like:
- Your Name
- Some Digits (Credit Card Digits)
- Validity Date
- Contactless chip
- Signature stripes (To authenticate your card)
- Logo of the issuing bank or institution
Most credit cards are offered by financial institutions like banks while some are from shopping malls, boutiques, rental services and more.
A credit card will always be of great benefit to the holder as it grants you extra funds to make purchases inline with your funds and extra credit.
Types of Credit Cards
There are different types of credit cards. Before now, I use to think all financial cards are credit cards until I asked my financial institutions for clarity.
Below, we’ve taken out time to outline the various popular types of credit cards and their basic uses.
There could be more than the below listed on other platforms BUT, all are classified into the four types of cards listed below:
- Business Credit Card
- Digital Credit Card
- Prepaid Credit Card
- Secured Credit Card
How Credit Card Works
You need to better understand how your credit cards work so as to better utilize your card without entering any issue with your financial issuer.
Now, your credit card gives you access to tap into your financial institution and use funds aside your readily available funds with the intentions of paying back later based on the fixed terms by your institutions.
Below are some of the things you need to know about your credit card as disclosed to us by FIRST BANK INC.
- Available Credit – This is the fund that is available to you via your credit. This is dependable on your available credit limits.
- Credit Limits – This is the amount of funds that are made available to you via a transfer of the culmination of your credits before you won’t be able to take in any credits.
- Credit Billing Cycle – This is the number of days before you are to clear your financial debts in order to continue using your credit cards. Most times, this is monthly based depending on your financial institution.
How to Protect your Credit Card
There are some simple yet effective ways of protecting your credit cards.
This will aid you in better securing your credit cards from unauthorized usage and irrelevant spending.
- Keep your card Safe – This should be your first priority. Keep all your banking details and cards safe and far from all unauthorized access.
The safety of your is not the responsibility of your financial issuer as it were.
Yes, they are responsible for keeping your account from been accessed by an external party BUT it is your duty to hide your personal details from unauthorized access.
You must at all times keep your card in a secure location when not in use. This can be in your wallet or in your vault at home as if your card is accessed, you have given the holder access to your funds.
- Do not expose your card details – The digits on your cards are for your usage only. Likewise the expiration date on your card and the 3 (three) digits at the back of your card.
Your card can actually be used without your signature or without your PIN CODE, depending on the portal and platform.
My credit card details for numerous of by hosting plans and those of my clients are saved on the hosting portal. I don’t really need to keep adding them whenever i want to make a transaction.
This also means that, anyone who have access to my card can easily use them on portals with like-settings.
- Spend Wisely – Your spending can actually increase your credit worthiness. When you spend wisely, your card issuer or financial institution would know that you are a wise spender and could increase your credit worthiness.
There are some transactions that you don’t need to use credits to purchase. Your financial institution wan’t to know if given you credit would be used wisely or invested wisely.
Spend wisely as this could increase your access to more credits.
- Use on encrypted platforms – Only use your credit cards on sites that are encrypted. With the advancement in technology, there are fake sites that are spreading all across the web requesting your card details.
Make sure when using any payment gateway, you confirm the authenticity of the site and the SSL installed on the site to make sure that the site is in fact genuine and to make sure your transactions are not been monitored by a third party.
- Report all missing credit cards immediately – In the event where your credit cards are stolen or misplaced, You are to report immediately to your financial institution so they can block your card from unauthorized usage.
Immediately you noticed that your cards are not in places where you kept them (Wallets or Safe), make sure to call your issuer so they can block the cards and help you stop all unwanted usage of your cards.
We’ve seen many people who have fall victims of online purchases that were on illegal portals.
There is a call of caution on how you handle your cards and every financial details.
These items are your bank/funds on the go and as such, you are to keep them safe by all means necessary.
Credit Card villa is here to teach you how to better protect your cards and as time goes on also, we will be disclosing different strategies to boost your card worthiness and increase your credit score.