credit cards (help)

The concept is simple, the practice of proper use can be difficult. Basically a credit card is a loan to you from the bank. When you use one you are borrowing the banks money to pay for what you want. If you pay it back before a certain time, the fancy word is amortization period. Then it is just like cash, and you will not incur any interest fees. If however, you keep a running balance, you will have to pay interest, depending on the card...what ever percentage it is per year, compounded monthly. So, if you have a credit card, and you borrow 1000. And can you can not pay them at all this month, with a 12% interest rate, on month two, you will owe them, 1010, and then you will pay interest on month three on the balance of 1010, instead of the initial 1000. That is what compounded means. They are a great way to establish credit when used properly, and you use them properly by treating them with respect and rules. The best rule you could have with a credit card, is do NOT use it if you don't have the cash to actually pay for something. Only use it when you could actually pay for that something. Then you never have to pay interest, and you get a high credit score for it. Sincerely and With Appreciation.