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How does a Credit Card work?

Discover how Credit Cards work and how to use one wisely, as well as their advantages and disadvantages in the context of your financial circumstances.



What is a Credit Card?


Offering a convenient way to make worldwide purchases, a Credit Card provides a line of credit that you pay back later. As well as offering financial flexibility, American Express Credit Cards can allow you to earn rewards as you spend.


Discover more about the different types of Credit Cards at American Express. 


How does a Credit Card work?


Put simply, Credit Cards grant Cardholders a short-term credit limit, which is set when your application is approved. As a Cardholder, you’re then able to spend up to this limit and, after an agreed period, you’ll receive your statement with the amount you need to repay.


You’ll need to repay at least the minimum repayment amount to avoid late payment fees and prevent a negative mark on your credit score, but interest will be applied to any amount outstanding. If you pay off the bill in full each month, you won’t pay interest on anything you’ve borrowed.


Read more on how to pay off your American Express bill here.


Advantages of a Credit Card


When used wisely, an American Express Credit Card could boost your spending power and provide multiple benefits:


  • Financial flexibility
  • Rewards, like cashback and Air Miles
  • Purchase protection
  • Improved credit score


Keeping on top of your Account is key to making the most of these benefits. Missed payments and neglected Accounts could result in disadvantages such as:


  • The possibility of debt
  • In turn, a negatively impacted credit score
  • Additional fees and charges


Read more on the potential advantages of Credit Cards here.


How to use a Credit Card


Convenient, safe and offering financial flexibility, Credit Cards can help you spread the cost of your purchases. From choosing the right Card, to making timely repayments, here’s how to get the best out of your Credit Card.



How to know if you're eligible


Interested in applying for an American Express® Credit Card? Check your eligibility with our quick pre-application form to see your likelihood of being approved for our Cards before you apply.


We’ve partnered with Experian who will carry out a check on your credit file; it won’t leave a mark on your credit rating, but it will inform us of your eligibility. Simply enter a few personal details and you’re done.


Find out more and check your eligibility here.




Find a Credit Card that suits your needs


Browse our Credit Cards and Charge Cards to find the right one for you. Read up on Credit Card fees here.




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