Question 1

What is a credit card?

Accepted Answer

A credit card is a plastic or metal card that gives you access to a line of credit. You may borrow against that line of credit as needed for purchases or cash withdrawals, up to a set credit limit.

Question 2

What's the difference between credit cards and debit cards?

Accepted Answer

At first glance, credit cards and debit cards seem similar. They're both alternatives to cash and may even be issued by the same financial institution. But only credit cards let you borrow money. When you pay or take out a cash advance with a credit card, you're accessing a line of credit. A debit card, on the other hand, is linked directly to your bank account. When you pay with your debit card, you're simply spending your own money. Generally, you can't use your debit card to spend more than you have in your bank account without penalties (though some lenders may allow you to link your savings account to your debit card in case you accidentally overdraft your checking account). Because using your debit card doesn't involve borrowing money, this activity doesn't typically appear on your credit report or help build your credit history.

Question 3

How do I apply for a credit card?

Accepted Answer

You may apply for a credit card online, over the phone, through the mail, or in person, depending on the card issuer. The application process may vary, but you typically have to provide basic information like your name, Social Security number, address, and income. Some applications may also include questions about your monthly housing expenses to give lenders a better understanding of your financial capacity. Students may also need to provide information about their schools to apply for a student credit card.

Question 4

How do I get a credit card if I have no credit history?

Accepted Answer

Beginner credit cards, like student cards and secured cards, may be good options for people with limited credit history. Or, if you're not ready for a credit card of your own, you may also ask a trusted friend or family member to add you to their credit card account as an authorized user.

Question 5

What are instant approval credit cards?

Accepted Answer

An instant approval credit card is a card that offers immediate approval for qualified credit card applicants. Some instant approval cards let you use your credit card instantly through a virtual card number. You typically need a good credit score to qualify for instant approval.

Question 6

What does it mean to be "pre-approved" for a credit card?

Accepted Answer

If you get pre-approved for a credit card offer, that means that a credit card issuer has reviewed your credit history through a soft credit check and determined that you meet the basic criteria. The card issuer has "pre-approved" you as a quality candidate for its product. If you're interested in the offer, you still need to submit an application, which includes a hard credit check. The card issuer may still decline your application, even if you were pre-approved.

Question 7

How old do you have to be to get a credit card?

Accepted Answer

You typically need to be at least 18 to get a credit card of your own. However, if you're under 18, you may become an authorized user on someone else's credit card account.

Question 8

How many credit cards should I have to help build credit?

Accepted Answer

You don't need to have a specific number of credit cards to build a strong credit history. Having multiple credit card accounts generally increases your available credit, which may decrease your credit utilization ratio (the amount of your credit in use at one time). The lower your credit utilization ratio, the better it is for your credit score in most cases. But it's best not to apply for many cards at once. Multiple credit inquiries in a short timeframe may have a negative effect on your credit. And if you struggle to manage multiple cards, you risk hurting your score by overspending or missing a credit card payment. When you're starting out with credit, it's generally safest to begin with a single credit card and gradually learn responsible habits. A credit limit increase from your card issuer may boost your spending power without opening a new credit card account.

Question 9

Why does your APR go up if you're making payments on time?

Accepted Answer

Your APR might go up for several reasons, even if you're up-to-date on all payments. If your credit score decreases or a low-APR promotion ends, your interest charges may increase. Some credit card APRs may go up in response to economic trends, like increasing prime rates.

Question 10

How can I lower my credit card interest rate?

Accepted Answer

You may be able to lower your interest rate by improving your credit score in some circumstances. If you're struggling to manage high-interest credit card debt, you may consider a balance transfer credit card offer with a low or 0% introductory APR. Just make sure balance transfer fees don't offset your interest savings.

Question 11

What tools are available to help manage my Discover Card account?

Accepted Answer

You can manage your account, securely and quickly view transactions, and make payments through the Discover online banking portal or mobile banking app. Text or email reminders may also keep you updated on your account.

Question 12

Can I avoid fees on a credit card?

Accepted Answer

You may not be able to avoid all credit card fees, but taking certain actions might minimize them. Choose a card without an annual fee. Discover has no annual fee on any of our cards. Pay your credit card bill in full each month to avoid high interest charges. Set payment alerts or automatic payments to avoid costly late fees and damage to your credit score. Limit cash advances, which are cash withdrawals against your credit limit. Most credit cards have a cash advance fee and some card issuers charge a higher interest rate on cash advances than other transactions.

Question 13

What are cash back rewards?

Accepted Answer

Cash back credit cards allow cardmembers to earn a percentage of the money they spend on eligible purchases back as a reward they may redeem for cash. Different cash back programs may offer different redemption options. You might redeem cash back as a gift card or payment method with select retailers, a credit toward your current credit card statement, or cash deposited directly into your bank account.

Question 14

Should I pay with a credit card or debit card when shopping online?

Accepted Answer

Whether you should use a credit or debit card to pay online depends on your situation and preferences. There are some advantages to paying with a credit card. If you use a rewards card, you may earn cash back or miles on your transaction. Credit cards may also offer more fraud protection than some debit cards. Your liability for unauthorized credit card charges is limited under federal law, as long as you dispute the charge within two days of identifying the unauthorized transaction. Some card issuers offer additional protections. With Discover, you get a $0 Fraud Liability Guarantee. You're never responsible for unauthorized purchases on your Discover Card. But if you may be tempted to overspend when shopping online with a credit card, a debit card may be a better choice.

Question 15

What is a statement credit?

Accepted Answer

A statement credit is money that your card issuer applies to your credit card account. For example, if you accidentally overpay, most credit cards will apply a statement credit toward your future purchases. You may also redeem credit card rewards as a statement credit, bringing down your balance.

Question 16

When should I redeem rewards on a credit card?

Accepted Answer

You should redeem your credit card rewards before they expire. If you're not sure how much time you have to redeem your credit card rewards, check your rewards card terms. With Discover, your rewards don't expire for the life of the account.

Credit Card Definition and FAQs

Key Takeaways

Did you know?

See if you're pre-approved

What are Credit Card Processing Fees?

Good Credit Cards for People with “Bad” Credit

What Is an Unsecured Credit Card?

Is There a No-Limit Credit Card?