Many of us are already actively using credit cards or are seriously considering getting one. Holders of credit cards are familiar with the terms of the grace period (grace period, interest-free period for using the card) and the rates and commissions in their bank. But even an experienced user of credit products can suddenly discover a new charge from the card, which he did not even know about. What can we say about beginners. So how do you get a credit card and make purchases with it painlessly for your wallet?
The main advantage of a credit card is that you do not have to go to the bank for another loan every time - the money is available at any time. At the same time, credit cards are issued to individuals without collateral and guarantors, as required by ordinary consumer loans. Also, a big advantage of the cards is the grace period set by the bank - as a rule, it is from 50 to 100 days from the date of the start of the use of credit funds, during which the cardholder can repay the loan without any interest.
How credit cards are processed
A credit card, like any credit product, requires a bank review of the application. Recently, a pleasant feature has become the possibility of issuing a card via the Internet, and this procedure will not differ in any way from the usual registration in a bank with a manager. To apply for a credit card, you just need to fill out a special form, leave all the necessary personal data, including income level and place of work. Your credit history will, of course, also count. After considering the application, the bank makes a decision or requests additional information. If the card is approved, it can be obtained from the bank or by mail (if the bank has such a service).
Features of use
Like any other bank card, credit cards require a service fee. The basic cost, as a rule, does not differ from servicing debit cards, but may vary depending on the value of the card (standard, gold, platinum, etc.), the features of the credit program and other special conditions of the bank. This amount is charged to the credit card either monthly or annually. There are also credit cards with free service. There is no catch in this - at the same time, the bank earns on the interest accrued through the credit line, on the deductions of payment systems that the client uses, for example, in stores, or on interest for cash withdrawals.
However, be careful when the free card service is a limited time special offer of the bank. Most often, the bank offers one year of free service, but after this period "forgets" to warn the client and completely legally charges the card for the next year, even if the holder did not intend to continue using the card.
Let's return to the main advantage of credit cards - the ability to pay with bank money without paying interest on the loan. In good, transparent banks, the grace period is not tied to any dates and starts at the moment when you start spending credit funds. That is, you received a credit card with 100,000 rubles in your account. A week later, you spent 100 rubles from the card - from this day your grace period begins. As soon as you repaid the loan and a day has passed, then with a new expenditure of funds from the card, your grace period starts over.
Some banks offer less friendly terms of interest-free loan repayment, tying the beginning of the grace period to a certain date of the reporting month. Then, depending on what day of the month you started using credit funds, the term of preferential crediting will also be determined. That is, the declared, for example, 60 days in this case is only a formal maximum.
In addition, often, when concluding an agreement, banks do not agree to clients that even if the loan is repaid on time, a commission is charged for its use. If, as a loyal customer, the bank offered you a card with free annual service, all the more be careful - it is likely that instead of a service fee, the bank will charge interest on any amounts borrowed, despite the grace period. Also, some banks do not give a grace period if you withdraw money through an ATM.
Remember that you can use your credit card to pay for goods and services without cash, but you cannot transfer funds to other accounts from this card. It is possible to withdraw cash from a credit card at an ATM, but a commission is always charged for this - as a rule, from 2 to 5%.
What does a loan consist of and how much you need to pay for it
The most important question that worries everyone who uses credit cards is how much will they have to pay for it in the end? Basically, there are three main components to your payments.
Credit card rates are among the highest.
If we talk about interest rates, then everything depends on a number of factors that the bank's program provides - on the amount borrowed, on the period of its use, on the account currency, etc. If the credit funds on the card are not used, then interest is not charged.
You can pay off your credit card debt in one of several ways. You can deposit money either on your own in any amount or use direct repayment - when money automatically covers the debt from regularly received income (for example, salaries).
It is important to note that if in consumer lending it is necessary to pay interest on the entire amount issued by the bank, then in the case of a credit card, only interest is paid on the funds actually used. Let us remind you once again that the accrual of interest on the loan begins only if the grace period has ended and the loan has not been repaid. That is, if you have 95,000 rubles left from 100,000 rubles at the end of the grace period, then you will be charged interest (according to your rate) on the 5,000 rubles missing on the account.
Please note that even during the grace period, you must make a minimum loan payment in the amount of 5 to 30% of the funds actually spent by a certain date of the reporting month. This will definitely be spelled out in your agreement with the bank.
Features and benefits of credit cards
In addition to the grace period, which makes life much easier when repaying a loan, banks are constantly developing additional bonuses for their clients. This can be cash-back - the accrual of interest on the funds spent back to the account, and a decrease in interest rates for regular customers, and partner loyalty programs.
The most popular are loyalty programs, which make it possible to accumulate so-called "miles" for flights with certain airlines, as well as for any card transactions and spend them on airline tickets and services. There are also co-branding programs that allow you to save up bonuses and spend them on certain goods or services, including mobile communications or even utility bills.
There is no question about the expediency of using credit cards - of course, they should be used - it is convenient and safe. But, as with everything, you need to be careful, show attention, read the agreement with the bank in full and do not hesitate to ask any questions. In addition, do not forget about the correct planning of your family budget and do not buy something for which you cannot pay even with credit funds. If you use the loan carefully, remember the deadlines and make the necessary payments on time, then there are no risks, and the debt hole does not threaten you in any way.
