If you know how to handle a credit card, it will bring you many benefits. We are not yet so widespread, so we often confuse credit cards with debit cards. Alternatively, we mark all cards as credit cards.
The debit card is linked to your current bank account
It makes it easier for you to pay because you don’t have to go to an ATM for every dollar just to withdraw money from your account. This also means that you can only pay with your debit card as much as you actually have on your account. When you place a debit card at a cash register in a store, you pay for the purchase.
The credit card is linked to your bank loan
which is in the form of a revolving loan. You will get a credit limit to which you can draw money, which you then gradually repay. When you take out a credit card in a shop, you actually borrow to buy.
But the credit card gives you some extra space. On the one hand, it gives you flexibility in lending money, and on the other, it gives you more leeway in paying off. This is not a regular consumer loan or quick loan. Of course, it is not always the best suitable solution, but otherwise it offers options that are not commonly found elsewhere.
Benefits of credit cards
A credit card really works well, and its biggest advantages include the following.
You always have the cash to pay and you don’t have to look for an ATM when you run out of cash. More and more merchants in our country accept money even by cashless, so credit cards will become more and more popular.
If you do not actively use it, it can also serve as a crisis reserve until you save your own.
One of the biggest advantages of credit cards is a long interest-free period. So you often have borrowed money for up to 55 days for free.
It’s enough time for you to pay off your two payday debt over time. In fact, it can also serve as a free loan, where about a single fee will be a few tens of dollars a month for card management. But always be careful to pay off the loan in this interest-free period. Credit card interest rates are less than as fast as loans, but are still between 10 and 25 percent per year. It is not a liquidation interest compared to other forms of loans, but it is still known.
Money withdrawal flexibility
A credit card will give you room and freedom to withdraw money. Sometimes you need to pay a series of small amounts or purchases. At that moment you don’t even know how much you need to borrow as a result. A credit card gives you the freedom in this respect – you can use it to the fullest or just keep it in a drawer for these situations.
It is always best to pay off the entire debt every month, but not every time. Fortunately, the credit card’s minimum payment installments are relatively low. You must pay the minimum installment in any case, otherwise you can pay the rest of the credit card limit at any time and with any extra amount.
Suppose you run out of your full 10,000 card limit for one month and can’t handle it later. So you pay the minimum installment (which you need 200, 300 dollars) and for the rest of the month you can easily send an additional installment – one day 500, another three days for ten dollars … this is shown in an extreme example , but in credit card repayment really does not limit anything.
You have an overview of expenses
Banks and other publishers send you paper or electronic statements of all account movements at the end of the month.
The same applies to credit cards – all payments are clearly written, so you can see where, when and for how much you bought. Having an overview is good. Alternatively, you can set weekly limits and receive alerts as you approach them.
You build good records
After 18 years of birth, we were only financially born. No bank or other company knows practically anything about us – they do not know how well and reliably we will repay. That is why many young people do not have a good chance of high credit or higher leasing.
Although the credit card is a small loan, the amount borrowed is added up in the registers. Although you may have a limit of only USD 5,000, but after a year of use you can have written in the registers that you borrowed over 50 thousand, which you returned without any problems in order.
After your life start, there is less distrust of financial companies. However, by regularly using and smoothly repaying your credit card, you are sending a sign that you are reliable and honoring your obligations. With this help you will build a better creditworthiness in your life, which can later help you get a mortgage.
Good companion abroad
A credit card is a good companion for traveling abroad. And sometimes it is absolutely necessary. You can withdraw money anywhere – you never know when an expense can come that would normally force you to go back.
With a credit card, you can survive this situation, and it’s also a solution when you don’t know exactly how much money you need because you only draw as much as you really need. In this case, it is a better solution than to finance your travel through consumer credit.
Moreover, in Western countries, most merchants only accept credit cards. You may not accept a debit.
It’s a so-called chargeback. It may happen that your ATM doesn’t give you money (even if it charges), the merchant doesn’t deliver the goods on the Internet, or deducts a higher amount, or you pay the same payment twice. You can file a claim against this and get a refund – the chargeback takes a while, but you get your money back.
The main thing is to provide the bank or the card issuer with as much evidence and evidence as possible that you tried to deal with the merchant first and he refused your application.
Most credit cards can be obtained with travel insurance or personal items insurance. Along with the ability to draw any amount you need at any time, you will also receive insured luggage, medical expenses, or paid assistance on the phone.
In addition, banks often contract with their business partners often have various discounts and benefits. For example, Moneta offers a bene + program for your credit cards, where you get a certain percentage of your purchases back to your account at selected merchants.
Many other credit cards also offer membership benefits. These include refunding part of the cashback or other exclusive discounts at selected merchants. Some even offer air miles or access to air lounges at airports.
Popular advantages include the possibility to issue more credit cards or contactless stickers to one account. One account can be used for the whole family, just set the individual limits well.
Will they issue a credit card to me?
Regular and sufficient income is required for credit card issuance. Also, the higher your income, the higher your credit card limit. Roughly you can expect that the limit will be close to one third of your income.
They will also issue you a credit card from the age of 18, although some companies have raised this threshold. The point is that it is still technically a loan, so as a client you must be of legal age.
Quite often, a more serious entry in the registers is an obstacle, as banks and other companies demand good repayment capability. It is not such a problem to issue a card to a young person without any records, but to issue a credit card to a young person with records is already quite complicated.