Most people who own a credit card may not be aware of the basic features of these helpful plastic cards. Oftentimes, what is only known is the ability of the credit card to allow its owner to make buying transactions without the need of having cash on hand – for having a credit card is as good as having money on your wallet. Other basic features involved with this powerful and friendly plastic sheet are credit limit, payment schedule, annual fee, penalty, and incentive scheme.

The credit limit is the maximum amount the owner can charge on it which includes the worth of procurement, balance transfer, penalty fine, and cash advance. The ruling on credit limit is not standardized. There are companies which strictly do not allow consumers to go over the credit limit while other companies allow them to over-borrow which comes with an equivalent fine.

The payment schedule is the timetable when the billing charge ends for a specific month followed by the arrival of the bill to the owner. Afterwards, an agreed upon grace period is given to the owner to make necessary payments before a certain fine is inflicted.

The annual fee is the payment for the credit card service that is obtained from the owner on a yearly basis. Other credit card companies allow the deferral of annual fee usually on the first year as a form of promotion.

The penalty and the incentive scheme are two different sides of the credit card system. One has a negative effect while the other has a positive effect on the owner. The penalty imposes a certain fine to the owner for not conforming to the agreement while an incentive is given for certain reasons such as promos or as a reward for being a loyal credit card user.

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