Capital One - Credit Basics

What Is a Credit Card?

Credit cards are a pretty handy thing to have. You get them from a bank or credit card provider like Capital One, and you can use them to buy stuff in millions of places, both in store or online. You can also use credit cards for balance transfers and taking out cash from an ABM (also known as a cash advance or cash withdrawal).

Before you sign up for a card, there's a few things you should know:

  • International fees: You can use your card worldwide, but you may see fees or charges for using your card outside of Canada. Check your credit agreement before you travel to be sure
  • ABM fees: Cash advances and withdrawals from an ABM usually come with additional fees and interest rates, so keep an eye out.
  • Credit limit: That's the amount of money you're approved to borrow.
  • Interest: Every card's got an annual interest rate for purchases, cash advances and balance transfers. You'll be charged interest on purchases you don't pay off each month. Also, there are often additional fees for balance transfers and cash advances, plus you'll have to start paying interest right away.
  • Secured credit card: A secured credit card is designed for people with limited, damaged or no credit history. To get a card, a customer provides security funds that will be used as collateral for the account. The benefit of a secured credit card is that by providing security funds, you'll increase your chances of getting approved.
  • Monthly statements: Details of all transactions you make will be shown on your monthly statement, along with:
    • the minimum amount you must pay
    • the date by which your credit card provider must receive at least your minimum payment