How do credit cards work?
A credit card gives you a spending limit that you repay later. Pay the full balance within the grace period and you typically avoid interest; pay only part of it and interest or fees may apply.
The core components
Your credit limit is the maximum you can spend. The grace period is the window between your statement date and the payment due date during which no interest accrues on purchases. The minimum payment is the smallest amount the card issuer requires each month. Review each card's terms on its official source — figures differ between issuers and card tiers.
When does interest apply?
Interest on purchases is typically charged only when you carry a balance past the grace period — meaning you paid less than the full statement amount. Cash withdrawals on a credit card usually attract interest from the day of the transaction, with no grace period, plus a cash advance fee. The rate applied depends on the card issuer's declared terms.
Fees to know about
Common fees include the annual fee (charged for the card itself), late-payment fees, foreign transaction fees on purchases in another currency, and cash advance fees. Some issuers waive the annual fee under conditions such as a minimum spend threshold. Always read the fee schedule in the cardholder agreement rather than relying on marketing summaries.
How your credit limit is set
Issuers generally base the limit on income, existing obligations and credit history. Some cards have a fixed minimum limit; others scale to your profile. Increasing a limit usually requires a new income assessment. Qrar360 shows the eligibility criteria issuers have published — including income thresholds and nationality conditions — where that data has been verified.
Using cards responsibly
Paying in full each month is the clearest way to avoid interest costs. If that is not possible, pay as much above the minimum as you can — the minimum payment is designed to keep the account current, not to eliminate the balance quickly. Track your outstanding balance against your limit, since high utilisation can affect future credit applications.