In order to choose between a credit card and a classic cash loan, you need to analyze everything in detail. After all, credit cards have both their advantages and disadvantages.
Instructions
Step 1
The key benefit of a credit card is the revolving limit. This means that as soon as the borrower pays off the amount of the debt, it becomes available again for making other purchases. Thus, the credit card acts as a backup wallet and ensures the availability of free funds in unforeseen situations.
Step 2
Also, many banks provide a grace period for crediting, during which you can use the card's borrowed money free of charge. It ranges from 55 to 100 days. In this case, it will be necessary to pay interest for the use of borrowed funds only after the end of the grace period. Whereas on a cash loan, interest is accrued from the day the loan is issued, even if the borrower has not yet had time to spend the money.
Step 3
Another advantage of a credit card is its ease of use. It makes it possible to make any purchases by bank transfer, including via the Internet. A credit card is quite convenient when traveling abroad and allows you not to take cash with you. At any time, the card can be blocked and protected from fraudulent activities.
Step 4
Most banks provide additional bonuses for credit card holders. In this case, the user can make purchases using the card and receive part of the money back in the form of cash-back.
Step 5
Among the disadvantages is the presence of an annual fee for servicing the card. If, in the case of a bank loan, it is necessary to pay only on the principal and interest for the use of borrowed funds, then annual payments are added to the credit card. Their size starts from 600 rubles, depending on the bank and the category of the card.
Step 6
It is advantageous to pay by credit card by bank transfer, and for withdrawing money from ATMs, you will need to pay a rather large commission (on average 4-6%). Therefore, if you plan to purchase goods on credit at a retail outlet that does not provide for cashless payments, then it is better to take a cash loan.
Step 7
The procedure for issuing a credit card itself is not much different from a cash loan. But interest rates on cards outside the grace period are an order of magnitude higher than on a classic loan.
Step 8
Finally, another disadvantage of credit cards is that they can be a source of impulsive, ill-considered purchases. This does not reflect in the best way on the financial position of the borrower and can lead to extremely negative consequences.
