How do you pay off a credit card?

Question

I'm only 15 and still don't know how it works. lol.

Do you have a certain amount of years until you pay off the full amount of something? Why do people have like 10 credit cards?

Answer 1

Every month you will get a statement showing what you purchased with the credit card during the previous month.  There will be a minimum payment you must make by the due date, or you can pay any amount between the minimum and the total balance you owe.  if you do not pay the balance in full then the portion you don't pay will be added to next month's statement along with the interest that is charged on that outstanding balance, and your purchases for the next month get added to it as well.  The credit card company will just let the balance keep accumulating and they will keep charging interest and sending you statements each month until the balance is paid off.  There is no time limit, you can carry a balance your whole life if you want, but that isn't recommended since you'll pay tons of interest as well.  There is a limit to how much you can charge, for instance if you have a $5,000 limit then you will probably not be able to use the card after your balance reaches $5,000 or close to it.  Your card will simply be rejected when you try to purchase something that results in you exceeding your limit.  Sometimes these purchases can slip through, and you get hit with tons of fees and high interst rates for going over your limit.  I don't understand why people have tons of credit cards, it's totally unnecessary.  Many people fall for special offers, like 15% off your purchase, if you open a credit card for that particular store.  Having the credit card gets you some perks, like access to some special sales and the stores catalogs & sales flyers get sent to you, but other than that there's no real advantage to having the store cards.  Most people will be just fine with only a Mastercard or Visa.

Answer 2

You can have a credit card forever

You can charge something then pay it off,  charge more and pay it off, charge even more and not pay the full balance, charge more and pay more of the balance, and it goes on and on and on.  Credit card companies will give you a limit that you can charge, i.e. $500 to start or $5000 or even more.  It depends upon your credit rating.  As you prove to the credit agencies that you are a responsible individual and you pay your bills on time, you get good credit ratings and more credit card companies want you to be their customers.  Then you get lots of junk mail from other credit card companies and you see that you can have 10 cards with thousands of dollars to buy stuff with.  People get greedy and accept these credit card offers.  They use all their credit cards and then find out that they cannot pay all the bills because they spent more than they have.  Life gets worse after that.  

Moral of the story:  When you have a credit card, only use it if absolutely necessary.  Pay your bills on time and watch your credit score as much as you watch tv.  Don't get greedy.  Life will be fine.

Answer 3

you pay with your money and if you don't have the money DON'T PAY WITH ANOTHER CREDIT CARD

Answer 4

Having 10 credit cards is a bad idea (unless you really need them and are responsible to pay them off)

Basically you rack up charges during the month, then at the end of the month you pay off the balance.

Answer 5

Credit cards send out monthly statements with a due date.  You have to make at least the minimum monthly payment (which is usually about 3% of the balance).

There is not time limit.  Credit cards are open, revolving accounts.  You continue to charge and pay.

Smart people only charge what they can afford to pay in full each month.  They use the credit card as a convenience -- don't have to carry lots of cash or a checkbook.  Credit cards are definitly NOT long term finance.

People get stacks of credit cards because they open new accounts for what ever reason (better interest rates, higher limit, different brand of card, rewards programs.) and never close the old accounts.  If they're all 0 balance, it's no big deal.  It's the folks who run balances up on all of those cards that end up in financial trouble.

Answer 6

People get credit cards firstly for different reasons. between visa, mastercard, am ex and discover you need to have 4 cards to cover all logos. then ppl get credit cards for point and reawrds and many a times they open new cards because many banks will give you 0% APR for the first 12 months. When I bought my house, I got two credit cards for 0% APR 12 months and kept a balance on it for 6 months and then paid them off. Once the introductory period expires, the APR can range from 10-24% depending on the bank.