Learn about the CARD Act, a credit card law that protects young adults.

Have you ever watched someone use a credit card?

Instead of paying with cash, using a credit card to charge it can be much more efficient.

In mere moments, the transaction is complete and you're out the door with purchase in hand.

Credit cards offer convenience and security. If you lose a credit card, you can report the card missing, and, depending on your timing, eliminate your obligation to pay for fraudulent purchases.

If you lose your wallet and it contains cash, you most likely will never see your money again.

How they work

Credit cards provide a way for you to take out a short-term loan. Each time you use your card, your credit card provider is paying the money up front with the expectation that you will repay it on a monthly basis.

You can avoid spending more money than you have by paying your balance in full at the end of each month.

If you don't pay the full balance at the end of a month, your credit card company will charge interest on your loan.

You'll still have to pay the amount due plus the added interest next month.

Reality check

To get a credit card, you must complete an application that asks for information about:

• You
• Your income
• Your expenses

Credit unions, banks, and department stores use the information in your applications and in your credit report to decide if they will lend you money.

The information in your application and in your credit report help lenders determine how much of a risk it would be to lend you money. 

If the lender approves your application, you receive a limited line of credit. Your credit limit might be as low as $500, or as high as $25,000.

The Federal Trade Commission (FTC) advises that you compare various credit card offers before applying for a card... 

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Credit Union of Colorado	What makes credit unions so great? Members like you. Every dollar you invest in your credit union earns you money while other members borrow it. When you're ready for a loan, other members' savings will be there to help you out at the lowest possible cost.