Every bank offers them. They are a convenient, safe and fast way of cashless payment. Many customers cannot imagine shopping without using them. They have become, as once, a wallet with cash, one of the elements of our everyday shopping experience. Of course, we are talking about payment cards, which – depending on how the bank is settled – are divided into, among others, debit, charge, prepaid or credit cards.
In the era of increasing competition on all levels of life and business, the saying: “our customer our master”, becomes relevant as never before. Banks are outdoing each other in proposals for new offers, wanting to meet our expectations. The case is not only about deposits, savings accounts, loans, but also, and perhaps above all, payment cards, including credit cards. While just a few years ago, using them was something special, now they have become part of our lives, and the use of them is associated with greater comfort than it is when making cash transactions.
Credit card – how does it work?
It is nothing else but a payment tool based on the amount limit set by the bank. Let’s assume that our limit is 4 thousand dollars, we are shopping for 1.5 thousand, so 2.5 thousand remains on the card. If we repay this debt, the available credit value goes back to the initial 4,000. In a sense, it is a loan granted by a financial institution, in many cases low or no interest. The latter occurs when the card holder repays all obligations in the so-called grace period, which in Polish reality usually lasts thirty days, but it also happens that the grace period is even two months. It is worth adding that receiving a credit card usually does not involve the obligation to open an account with a given bank.
Credit and payment card?
Many payment card holders are unaware that there are different types. Gradual expansion of the offer forced banks to create many different types of cards. In the most basic division we distinguish credit, debit, charge, prepaid (so-called prepaid cards) and virtual cards. Therefore, a credit card is one of the types of payment cards. We wrote in detail about the characteristic features as well as the differences between the various types HERE.
Advantages of paying by credit card
The practicality of this type of payment instrument is above all at the top of the list of pluses. In the era of advanced technology, you only need a few seconds to make a purchase in the store, settle the bill in the cafe, buy a bus ticket or pay the courier for the package delivered. We can also add the aforementioned interest-free period to the basket with advantages, which means that the card can easily compete with low-interest loans for small amounts. It is also important that many banks make it possible to split a loan into installments, and also introduce attractive rebate programs for owners of this payment method. It is also convenient to repay the debt itself and then obtain another limit. In the case of normal cash loans, after paying one liability and before receiving another loan, we would have to re-verify and be required to complete numerous formalities. Experts also note that cards have a high degree of payment security, which can also be attributed to them as an advantage.
Disadvantages of paying by credit card
To talk about the shortcomings of having a credit card, we must first refer to the human psyche. The point is that what your eyes can’t see, you don’t regret that heart. It is widely known that “electronic money” is spreading faster and more efficiently than cash. This can lead to a lack of expenditure control, and thus a deepening of debt. The problem may also arise in the event of late repayment of liabilities. If this happens, we will have a high interest rate of up to 12 percent per annum. One of the minuses are also numerous fees and commissions that may meet the client. I am talking about high service costs, i.e. the price e.g. for issuing a card or mandatory purchase of an insurance package.
How to choose What to watch out for
When comparing bank offers in the area of credit cards, you should first check the maximum and minimum limits, as well as the table of any fees that we will incur in connection with the so-called “plastic money”. These include, in particular, service commissions, ATM withdrawals, and card payments abroad. It is also worth familiarizing yourself with the additional possibilities offered by using the card, such as bonuses, bonuses, rebate programs and money back systems. We advise you to make sure how much interest the bank will charge if you do not repay the debt during the interest-free period. It’s best to go to the bank’s outlet or contact its customer service department and ask for the details of the offer.
What criteria must be met?
The procedure for applying for a credit card is not difficult. Of course, it requires less formalities than applying for a loan, but the bank checks similar areas of our lives, i.e. creditworthiness. In this context, it is worth reading the text about ways to increase the chances of getting a loan available HERE.
Let’s start with who can apply for a card? Virtually every adult, and certainly one who is over 21 years old – some institutions introduce such age requirement. The bank will probably ask for a certificate of income, employment, statement of account, which shows remuneration transfers, PIT form for the previous tax year, etc. When assessing the value of the limit, the aspect of employment stability is important and here, naturally, people employed on the contract are in the best position work.
Irregular income and credit card
People working on civil law contracts or running a business with irregular monthly income are in a worse position. As a rule, the bank takes into account earnings from the last twelve months or even two years in this case. However, you should not worry about low pay. Many banks accept applications even from people whose monthly payment barely exceeds $ 1,000. Of course, the debt limit on the card of such a holder will be the lowest available.
Credit card – reviews
Given the numerous user comments, you can confidently recommend this type of solution. Payment by credit card takes a while, and repayment of debt, if it is made in a timely manner, does not generate additional costs. This is certainly a convenient option for people who lack money for current needs and have something to pay off their liabilities in the next month.