An Independent Non-Profit 501(c)(3)
Consumer Credit Counseling Service
American Credit Counseling Service, Inc.
Community Service Since 1988
4 Taunton Street, Suite 5 Plainville, MA 02762
Toll Free (800) 729-0551 -- Fax: (508) 695-0148  --  Contact Us

What is a Credit Card?

Credit cards are issued by banks, savings and loans, retail stores and other businesses. Customers may seek either a secured or unsecured credit card, depending on their individual repayment histories. Holders of a credit card have the authorization to purchase goods and services up to a preset amount, called a credit limit. If the entire balance is not paid in full, the credit card issuer can legally charge interest fees on the unpaid portion. The payments subsequently reimburse the supporting bank.

Secured Credit Card

A "secured credit card" is a credit card used to build a good credit record for people with a damaged or poor credit score or for people with little or no credit history. A cardholder must secure with a savings deposit so that the card issuer is guaranteed payment. The amount the cardholder can charge is limited by the amount he or she deposits in the savings acct. It is normally kept in an interest bearing account by the card issuer and is refunded to you after you have proven creditworthiness according to their terms. If the customer fails to make adequate payments, the deposited money will be used to satisfy the credit card debt.

Unsecured Credit Card

An unsecured credit card is usually issued to those who have a good credit history and have shown an ability to repay the accumulated debt on time. Credit limits are determined on an individual basis, and may be raised or lowered based on performance. Credit card use can become a problem when the holder accrues more debt than a regular monthly payment can cover. The issuing bank does allow credit card users to carry over balances every month but interest rates may also accrue on the balances. If you miss a scheduled payment, you will be charged a late fee and it can cause the bank to raise interest rates on a delinquent account. If you are only able to pay the minimum amount due every month, you will not be reducing the actual debt incurred. The minimal payments may only apply to the accrued interest. You do not need a credit card for living, but it's a convenient form of identification and fast credibility. A credit card gives immediate credibility for services such as hotel reservations, car rentals and airline ticket reservations. Those without a credit card often have to guarantee their reservations with cash deposits or several forms of identification.

If you are having problems with your credit cards or are unable to get a credit card, give ACCS a call. Our Certified Counselors are standing by!

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