How do credit cards affect my credit score?

The simple ability to repay your credit card balance on-time is the most important factor to your credit score. However, the utilization of your credit line and simply applying for a card can also impact your score.

What does it mean to get 0% APR on a credit card?

An APR (annual percentage rate) of 0% means that you won't pay interest on your credit balance while this rate is present. Keep in mind that these rates are almost always temporary and that you still must make the minimum monthly payment.

Why can't I pay friends or my rent with my credit card?

When credit cards are accepted at retail outlines or on websites, the merchant must pay a fee to the card issuer, which helps subsidize card benefits and combating fraud. Your landlord and friends would obviously be unwilling to pay such a fee when accepting a payment.

How are store credit cards different from other credit cards?

Store credit cards are known as "closed loop" cards, which mean that they can only be used at that specific store, unlike "open loop" bank-branded credit cards that can be used anywhere its network is accepted. There are also "co-brand" credit cards that offer benefits for spending at the specific retailer but can also be used elsewhere.

How are card issuers able to offer rewards to cardholders?

When credit cards are accepted at retail outlines or on websites, the merchant must pay an "interchange fee" to the card issuer in exchange for providing a  form of payment that, in some cases, helped enable the purchase. Issuers use a portion of this revenue to fund the card's rewards, APR promos and other benefits and perks.

Can I change my credit limit after one has been assigned?

Most card issuers allow you request a credit line increase. However, your request is not guaranteed to be approved - it will depend on your history paying your credit card bill and the issuer's credit risk tolerance.