Credit card is a piece of plastic that allows you to pay for services and sales even though you do not have cash in hand. The borrower is expected to make monthly payments on the outstanding balance to the credit card company. A credit card holder may pay just the minimum amount during the due date, usually once every month. If the credit card holder fails to pay the required minimum amount, a finance fee is going to be charged to him.

Credit cards are available from a variety of sources like banks, trust companies and credit unions, financial institutions, finance companies and department stores.

Great Reasons to use Credit Card:

•Credit cards eliminate the need to carry large amounts of cash.
•Many of the Credit cards offer excellent rewards programs, enabling card users to earn airline miles, cash back programs, earn rewards and other perks on everyday purchases.
•Credit cards are also great in an emergency they make it easy to lay your hands on some quick cash and provide a convenient way to make unexpected purchases.
•A great way to track your monthly expenses.
•One can easily purchase anything simply by mail or phone

How is the finance charge calculated?
The finance charge is the amount you pay to use credit. The amount depends in part on your outstanding balance and the APR.
Credit card companies use one of several methods to calculate the outstanding balance. The method can make a big difference in the finance charge you’ll pay. Your outstanding balance may be calculated,
•Over one billing cycle or two,
•Using the adjusted balance, the average daily balance, or the previous balance, and
•Including or excluding new purchases in the balance

How long is the grace period?
The grace period is the number of days you have to pay your bill in full without triggering a finance charge. For example, the credit card company may say that you have “25 days from the statement date, provided you paid your previous balance in full by the due date.” The statement date is given on the bill.
The grace period usually applies only to new purchases. Most credit cards do not give a grace period for cash advances and balance transfers. Instead, interest charges start right away. If you carried over any part of your balance from the preceding month, you may not have a grace period for new purchases. Instead, you may be charged interest as soon as you make a purchase (in addition to being charged interest on the earlier balance you have not paid off).