Credit Cards FAQ

Frequently Asked Questions about Credit Cards

    Why do I need a credit card?

    While a credit card may have risks or downsides, these are vastly outweighed by its benefits. The primary purpose of a credit card is to provide you with credit. This means that you can buy something today, but not have to pay for it until later, thus borrowing money from the credit card issuer. One of the best aspects of most credit cards is that if you pay your bills on time and in full, you are able to borrow this money with no interest, effectively receiving a free loan. You only have to pay interest if you do not pay your bill in full by the due date. In this case, you do have to pay interest, and often at a fairly high interest rate, although this may often be the cheapest and/or the only way for many people to borrow money. Current interest rates, or APRs, on credit cards are anywhere from around 10% to over 20%, although they can be as low as 0% for promotional periods.

    In addition to borrowing, there are many other reasons why having a credit card is valuable. It is important to establish a credit history, since in many cases, having no credit can be as detrimental as having bad credit. Even if you do not use your credit card often, it can be crucial in certain situations, such as emergencies, when making hotel or restaurant reservations, or when shopping online. A credit card is more secure than a debit card, since you can dispute charges before paying them.

    Return to Credit Cards FAQs


Search our site for more information about Credit Cards:

Chase Freedom® Visa - $100 Bonus Cash Back + 0% Intro APR

Bottom line: Excellent combination of cash back rewards and 0% intro APR; $100 bonus opportunity
Citi® Diamond Preferred® Card

Bottom line: Citi's 18-month 0% intro purchase and balance transfer APR period is the longest of any card; post-intro APR is also low
Chase Freedom® Visa - $200 Bonus Cash Back

Bottom line: Our top choice for cash back rewards with $200 bonus opportunity and 1-5% back on purchases
Southwest Airlines Rapid Rewards® Plus Card from Chase

Bottom line: Top travel rewards program contender with a value of $0.017 per point for flights, free flight with first purchase, excellent choice for frequent Southwest fliers
Escape by Discover® Card

Bottom line: Strong travel rewards card; 0% intro APR on balance transfers and purchases; earn up to 25,000 bonus miles in 25 months
Citi Simplicity® Card

Bottom line: Citi's 18-month 0% intro purchase and balance transfer APR period is the longest of any card, no late fees
Blue Cash Everyday<sup><small>SM</small></sup> from American Express

Bottom line: Up to 3% cash back on everyday spending; $100 cash back bonus; unlimited cash back; 0% intro APR
Citi® Platinum Select® Visa®

Bottom line: Citi's 18-month 0% intro purchase and balance transfer APR period is the longest of any card; post-intro APR is also low
Discover® More Card - No Balance Transfer Fee

Bottom line: Best card for balance transfers; No balance transfer fee, 12-month 0% intro APR on purchases & balance transfers, up to 5% cash back.

Compare Credit Cards


Disclosure: NextAdvisor.com is a consumer information site that offers free, independent reviews and ratings of online services. We receive advertising revenue from most of the services we review. Our editors thoroughly research and whenever possible test each service we review and offer their honest opinions about each one. We are independently owned and operated and all opinions expressed on this site are our own.