Credit Cards 101
Move past the basics and become an expert
Frequently Asked Questions
What is the best way to use a credit card?
The best way to use a credit card is to maximize its value while avoiding interest payments. In most cases, this means using credit cards that offer the most rewards and perks for your spending while making sure you pay off your balance each month to eliminate interest charges.
Should you have more than one credit card?
Yes, if you want to keep your credit card usage as simple as possible. However, if you're comfortable using multiple cards, you can sharpen your credit-card rewards strategy and decrease your utilization ratio.
Are travel cards worth the annual fee?
Yes, if you know how to maximize your rewards, redeem them, and take advantage of the card's perks. In most cases, the perks and rewards-earning potential of the best travel rewards cards far exceed the annual fee you pay to use the card.
Can credit cards build credit?
Yes, but you have to be smart about how you use your card. Credit scores emphasize your payment history and your credit utilization. So, when you open a new credit card, you should pay off your all purchases and fees each month by your due date to ensure you don't carry a balance and that you don't pay late.
Are there purchases you shouldn't make with credit cards?
Yes, there are several purchases you should make with your credit card, including: purchases that you can't afford, put you over your credit limit, or that could shift your utilization from below 30% to above 30%.
A credit card issuer is a bank or credit union that offers credit cards and extends credit limits to cardholders who qualify. When consumers make credit card purchases, the credit card issuer is responsible for sending payments to merchants for purchases made with credit cards from that bank.
Credit card preapproval means that you've met a card issuer's initial criteria for a card. This doesn't mean you'll be approved, though.
A chip card is a payment card that’s equipped with a secure computer chip that is all-but-impossible for thieves to copy.
UDAAP is an acronym in the consumer finance industry that stands for “unfair, deceptive, or abusive acts or practices.”
Credit Card Network
A credit card network authorizes, processes, and sets the terms of credit card transactions, as well as transfers payments between shoppers, merchants, and their respective banks.
Cash back is a bonus paid to credit cardholders who make qualifying credit card purchases.
An airline credit card is a type of travel rewards credit card that allows consumers to earn airline miles and other perks with a specific airline in exchange for making purchases.
Student credit cards are cards designed for college students who are looking for a first credit card. These cards often have APRs similar to regular credit cards but are appropriate for young people who don't have much credit history. There are even student credit cards that offer rewards.
My Chase Plan
The My Chase Plan lets you pay off Chase credit card purchases of at least $100 in fixed monthly installments with no interest. Learn how it works and what to consider before setting up a My Chase Plan.
Credit Card Debt
Credit card debt is a type of revolving debt. You can keep borrowing month after month as long as you repay enough that you never owe more than your credit limit. Credit card accounts can be used indefinitely, unlike installment loan accounts that are closed once the balance is paid off.