Credit Cards

Credit accounts issued by banks.

How banks make money from them:

• A small percentage of each transaction (paid by the merchant) goes to the card network and bank
• High interest rates on carried balances
• Balance transfer fees

Benefits to consumers:

• Points or cash-back reward systems
• Generous fraud protection

In Roo, credit cards can be managed in two ways:

• CC-Mode — designed for credit cards, automatically sets aside money in the Debt Payment pouch as you spend
• On-Budget — treats the card more like a cash account, which can simplify things but only works well if you pay your statement in full each month

The bottom line: Credit cards are powerful tools that can help (cash rewards, credit building, fraud protection) or hurt (high-interest debt). If you’re carrying a balance, consider using the Liberate Machine to create a prioritized payoff plan. Seek guidance from a financial professional for your specific situation.