Debit or credit cards are in everyone’s wallet today. The number of issued credit cards is growing year by year. Its presence helps in solving some problems with finances. However, in order for the use of a credit card to be the most effective and profitable, some nuances must be taken into account.
What is a credit card?
A credit card is a plastic card with a limited amount of borrowed funds issued by a banking organization. This type of card is widespread, as it allows you to make purchases even in the absence of own funds. The appearance of credit cards competed with consumer loans in the services market.
In this article, we will consider how credit card payments go.
Card selection and design
Lately, loyalty in obtaining credit cards has become unprecedented. It got to the point that some banks send the card by mail, and there is no need to leave the house to get it and receive it. The usual practice of most banks is to request a passport and a certificate of income for the client. In some cases, additional documents, such as a driver’s license or passport, may also be required.
However, more and more banks are opening online services to apply for a credit card. There are also services to deliver a finished card to your home. However, the rule applies here: the simpler the processing and receipt, the more expensive the loan will be for the borrower. The easiest way to get a card is if you have already established yourself as a trustworthy borrower and use other offers of this organization. Credit card payments are now very popular.
Amount of credit
A banking organization sets a limit on the amount of a loan based on the applicant’s ability to pay. Each individual bank calculates the limit in its own way, taking into account factors such as social status, age, place of employment, availability of loans in other organizations, etc. When applying for a credit card, you should get comprehensive information about the bank's tariffs, since hidden additional commissions, which will ultimately affect the profitability of the issued loan.
What to look for?
The main thing you need to pay attention to when issuing a credit card is:
- Grace period and the option of its calculation by the bank.
- Charging additional fees.
- Presence of fines for early repayment of debt.
- Additional services and services, as well as their cost.
Features of use
The grace period on the Mastercard or Visa card is the period of time from the moment of using the credit card on which the bank does not charge interest. However, in this case, you should carefully study how the grace period is calculated. There are two calculation options:
- The countdown starts from the moment of the first withdrawal of funds. Thus, even if the client has withdrawn money several times, the grace period is calculated from the moment of the very first card transaction. To start a new grace period, you must completely pay off the debt on the card.
- The grace period is calculated for each operation.
About the grace period
When settling with credit cards, the longest period of the grace period of debt repayment is 55 days. Such a service is very beneficial for the borrower, as it makes it possible to use credit funds for free, provided that the debt is fully repaid within the time agreed by the bank. The grace period does not always apply to individual transactions on the card. Some banks limit the use of the grace period to purchases at specific partner firms. All of the above features must be mandatory prescribed in the credit card agreement. Now it is even possible to pay for a taxi by credit card.
Terms and Conditions
The conditions under which the borrower will be able to withdraw money from a credit card should also be spelled out in detail in the contract. Withdrawing cash from a credit card most often involves an additional fee. The bank may determine a cash withdrawal limit . The standard limit is one day, but it can be canceled when contacting the bank. If you plan to withdraw a larger amount than stipulated by the limit, you need to contact the bank.
Where can I pay?
Now in almost all ordinary stores, a credit card payment terminal is available.
But they are often used for shopping in online stores. To perform this type of transaction, the data of the cardholder is indicated, including the validity period and identification code. The latter consists of three numbers and is located on the back of the card. It may not be on the cards of the Visa Electron Maestro system. Cards "Mastercard" and "Visa" have this code. It can not be reported to anyone, as this will enable fraudsters to make purchases with a card.
Minimum payment
Most often, the bank provides for a minimum payment, which must be paid monthly. As a rule, this is 5-10 percent of the amount of the loan taken. Sometimes card payments are fixed. Interest begins to be charged at the end of the grace period. The rest of the amount will be credited to the card account and is available for next use.
Paying with a Sberbank credit card is very simple. It is accepted at all points of payment.
Commission
Additional fees are an integral part of the total cost of servicing a loan. These fees are charged in the following situations:
- Cash withdrawal by cash desk at a bank or ATM branch.
- Additional services, such as online banking, SMS, reissuing a lost card, increasing the limit on the card, etc.
- Card status. The presence of a large number of bonuses and benefits makes issuing a card more expensive.
This list can be very long, therefore it is worth paying special attention to the tariff that you have chosen so as not to get into an unpleasant situation, for example, when paying for a taxi by credit card.
Cashback
There is also a phenomenon that has become widespread in Russia not so long ago. This is cashback or, more simply, the return of a certain part of the money for purchases on the card. The return interest may be different for each bank. Sometimes the maximum cashback applies to specific outlets and networks.
Credit card payment methods are very diverse. The only thing is that you cannot transfer money from it to other cards and accounts.
conclusions
Thus, in order to maximize the benefits of using a credit card, you must:
- Remember the grace period and try to pay off the debt before it ends.
- Try to pay by card only through the terminal or online, so as not to pay for cash withdrawals.
- If possible, refuse additional services.
We examined how credit card payments are made.