Credit Cards – Bankinginfo

WHAT IS A CREDIT CARD ANDHOW IT WORKS?A credit card is a payment instrumentthat enables you to make purchasesof goods and payment for services insteadof using cash. You can use the credit cardat any merchant, locally or internationally,which displays the same credit card brandas that on your credit card.When you use your credit card, thecredit card issuer will pay the merchanton your behalf first and bill you later.Once you get your monthly statement,you are required to settle at least theminimum repayment amount by the duedate. An interest free period (usually20 days) is granted by the credit card issuerwhere you do not have to pay any intereston the outstanding amount. The creditcard issuer will impose finance charges(interest) on the outstanding amount ifit is not paid by the due date.A credit card can also be used for cashadvances at Automated Teller Machines(ATMs) and at respective credit card issuers’counters. However, a cash advance fee maybe charged for each cash advance transactionon top of the finance charge. There is alsono interest free period for cash advance.The finance charge is calculated from thecash advance date.The credit card issuer will send you amonthly credit card statement with detailsof your purchases including cash advances(if any), the total outstanding balance,the minimum payment amount and thepayment due date.APPLYING FOR A CREDIT CARDYou can apply for a credit card frominstitutions issuing credit cards, as long asyou are 21 years old or above, earn anincome of at least a minimum of RM18,000per year and comply with any otherrequirements set by the credit card issuer.2