Your contract with your credit card company is detailed in your credit card agreement and becomes effective the first time you make a purchase. It is important that you understand your credit card agreement, because it is legally binding and can have a big impact on your financial life.

Both secured (obtained with a deposit) and unsecured (obtained without a deposit) have agreements, but they are slightly different. For example, the agreements for a secured card will probably say that if you miss a payment, the company will take it from your deposit. An agreement for an unsecured card would not contain that clause.

The Schumer box is a place on your agreement where key information (rates and terms) about your contract is spelled out in plain English. It states your credit limit (the highest your balance can be without breaking your contract) and your payment due date (the day they expect to receive your payment). It also tells you how late you can be on a payment without incurring charges (your grace period).

After you finish your first billing cycle (usually a month, give or take), you will receive a statement. Your monthly statement will include every charge you made, including all retailers (businesses and stores) and service providers.