There are currently so many credit card options that users don’t know which one to apply for or which one is the best option for them. Several years ago having a credit card was almost a luxury that not everyone could afford, however, conditions have become people can even have a credit card online without any problem. The latter is very useful for small purchases and online; however, if a higher quota is needed, it is time to investigate the best option.
What should you consider before applying for a credit card?
If you have never had a credit card, but if you have a debit card, you should know that they work very differently. Although with both you can make purchases, pay and withdraw, with the credit card you can defer payments to installments and also pay with money that you do not actually have available, this being the main difference of credit and debit card.
Before applying for a credit card, you must consider its advantages and disadvantages. Depending on the type of credit card, for example, visa credit card, you will notice that the interest rate is different, and that is very important because you will also receive the same month-to-month interest.
Even so, there are other great advantages of credit cards, for example, many offer discounts at certain establishments with which they have agreements, you can also make cash withdrawals, something you cannot do with debit cards. Remember that these money withdrawals are usually deferred to several installments and are something specific to each bank and card.
It is important that you investigate bank cards and that you use online tools that help you buy different options since selecting a credit or debit card is a very important decision.
The idea is that you have the one that offers the most benefits, with the lowest interest rates in the market. Even some credit cards offer miles and points that you can later redeem for different prizes.
What is the operation of a credit card?
Basically, with a credit card, the one that pays for your purchase or your withdrawal is the bank. And you will have a month or less, depending on the term and day, to return that amount. This is a very basic explanation if you don’t know what a credit card is. Also keep in mind that you can select the number of installments when paying with your credit card, if you do it only, you will have no interest at the time of payment.
As a curious fact, credit cards are the most widely used method of payment throughout Spain, and on average, each person has between 1 and 2 cards, not counting if they are debit and credit, they could even be more.
As we mentioned before, with all the cards, if you make the payment in a single installment, no interest will be generated, but if you decide to defer that payment in several installments, the interest can vary between 20% and 27% APR; Although most banks offer 25 days at 0% TIN, however, we know that it is not always easy to pay a debt in such a short time.
Why have a credit card?
There are currently online credit cards that work like a debit card, as they are recharged with money from the savings account and can be used in online purchases; An example is the Bank prepaid card. However, this online credit card does not have a physical plastic, so it is limiting when you leave. That is where the main advantage of credit cards comes, because on a trip they are always available and accepted in the vast majority of stores.
In addition to this, you have 25 days without interest, so if it is a short trip, you can use your credit card without a problem, and pay once you return. Keep in mind that if this money is not returned in those 25 days, the interest increases considerably.
Another advantage is that you can apply for a credit card online, depending on the bank you wish to complete the process with. Many times it arrives directly at your house without having to go out and make long lines.
Some credit cards include travel insurance related to accidents, lost luggage and flights; In this way, you will not only have advantages in the payments of your trips, vacations, garments, appliances, etc., but you also have a bank support on your credit cards, something that a debit card may not offer you.
Care you should have when requesting a credit card
Although a credit card has many advantages, it also has many responsibilities that cannot be overlooked. Each bank credit card will have an assigned quota, and will not be the same for all users, as this also depends on their risk profile, credit history, and income. Therefore, requesting credit cards is not so simple for everyone, as banks have to ensure that money can be returned.
Another factor of credit cards that must be taken into account is their interests that can often be raised without realizing it. Equally commissions and monthly payments. The vast majority of bank cards have a monthly cost that must be paid only for having such a benefit. And all this must be taken into account before applying for a credit card.
When thinking about obtaining a credit card, keep in mind your needs and the different types of credit cards, as some, such as the revolving card, is a bad option due to their great interests.
If you really need it just to make purchases online, a prepaid card or wallet is a better option for you. If you are traveling, you can get one with lower interest rates, and if you need only a sum of money, a personal loan may be a better option. Find out and make the best decision according to your needs.