Credit Cards: Frequently Asked Questions (FAQs)

A credit card is a payment tool issued by banks or financial institutions that allows you to borrow money up to a set limit for purchases or cash withdrawals. You are required to repay the amount borrowed, typically on a monthly basis, either partially or in full.

While a debit card uses your own money from your bank account, a credit card allows you to spend borrowed money up to a limit. You’ll repay the amount later, either with or without interest, depending on how quickly you pay it off.

Credit card usage affects your credit score, which is a measure of your financial trustworthiness. Timely payments, low credit utilization, and a long credit history contribute positively, while missed payments or maxed-out cards can lower your score.

Learn more about credit scores from Experian or Equifax.

The minimum payment is the smallest amount you must pay by the due date to keep your account in good standing. However, paying only the minimum means you’ll be charged interest on the remaining balance.

Yes. If you don’t pay your full balance by the due date, you’ll typically be charged annual percentage rate (APR) on the remaining amount. Some cards also charge interest on cash advances or late payments.

A grace period is the time between your billing cycle’s end and your payment due date. If you pay your full balance within this time, you won’t be charged interest on new purchases.

Consider factors such as:

• Interest rates (APR)
• Annual fees
• Rewards or cashback offers
• Foreign transaction fees
• Credit limit

Compare cards on global platforms like NerdWallet or Bankrate.

• Standard Credit Cards – Basic cards for everyday use
• Rewards Cards – Offer cashback, miles, or points
• Secured Cards – Require a deposit; ideal for building credit
• Business Credit Cards – Tailored for business expenses
• Student Credit Cards – Designed for college students

Yes. Most credit cards from Visa, Mastercard, American Express, and Discover are accepted globally. However, foreign transaction fees may apply, and it's recommended to notify your issuer before international travel.

Immediately report the loss to your credit card issuer. They will block your card and issue a replacement. Many providers also offer zero-liability fraud protection for unauthorized charges.

Yes, provided you use them on secure, encrypted websites and monitor your statements. Some banks offer virtual credit cards for added protection during online purchases.

Yes, but this is called a cash advance, and it usually comes with high interest and additional fees. It's not recommended unless it’s an emergency.

Potential hidden costs may include:

• Annual fees
• Late payment fees
• Over-limit fees
• Balance transfer fees
• Foreign transaction fees

Always read the terms and conditions carefully before signing up.

This is the maximum amount you’re allowed to borrow on a credit card. It’s determined based on your income, credit history, and creditworthiness.

Yes, many issuers allow you to request a credit limit increase online or over the phone. Maintaining a good payment history and low credit utilization helps improve your chances.