How Does a Charge Card Work?

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A charge card, or credit card, allows an individual to make purchases with a card using funds from the credit company. Charge card purchases typically have to paid back with interest. Discover different types of charge cards with information from a registered financial consultant in this free video on credit cards.

Part of the Video Series: Personal Finances & Money Management
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This is financial adviser Patrick Munro talking about how does a charge card work. A charge card is just that, it's a charge that you entail when you have credit with a company. There are various types of charge cards, the most common is department store charge cards where the business basically will open up and account for you and you can use the charge plate at that place of business for your purchases. Normally these cards carry a very high rate of interest, but if it's balance is paid off on a monthly basis, it's a convenient way to budget items. Additionally a charge card can be in the form of a credit and those are traditionally known under the VISA, MasterCard and American Express and Discover labels and the way it works is that they will pay for your purchases or cash advances just as if you would have had the money in your possession. There is interest accrued when you do that particular service. This is financial adviser Patrick Munro talking about how does a charge card work.

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