A credit card is one of the ways to borrow money quickly, easily and conveniently. When the bank offers us a card, however, we should consider whether it is a good solution. A credit card is not a simple payment card. How to use it?
Thanks to a credit card, we can borrow a large sum of money almost immediately – by simply paying it at a stationary or online store. This is a convenient way to cover various expenses, but we must remember that it also has its downside.
How does a credit card work?
A credit card is a card that, unlike a regular payment card, is not linked to our bank account. This is really a form of granting to us by the bank loan with the specified upper limit depending on our income.
Therefore, when we pay with a credit card, we do not really spend our money, but the bank’s money. For such a card, however, a special account with a maximum balance equal to the card limit is opened – we will pay off our debt if we pay off the credit card.
The so-called interest-free period is also associated with having the card. It usually takes about fifty days. During this time, the use of debt on the card does not cost us anything. Interest for our loan will be charged only when we exceed this period and we will not pay back our liability.
Traps associated with the use of credit cards
A credit card can be a convenient solution for anyone who wants to shop comfortably. Then, when we spend the money with a credit card, our earnings can wait on the account or on the deposit, paying interest. We can also afford larger purchases when we do not have enough money in the account.
However, we must remember that the use of a credit card is associated with pitfalls, which we may also expose to unconsciously. First of all, we should not scrape with card money when we are unable to pay it off in a timely manner – only then is the use of a credit card pays off.
We should also remember that using an interest-free card is possible only when we pay without cash. This means that the bank may charge us interest when we withdraw money from an ATM. Thus, credit cards are not suitable for withdrawing money.
How much does it cost to use the card?
It may seem that the use of a credit card is inexpensive or even free when we use it only for non-cash payments and we pay it back on time. However, we must remember the other costs.
The main expense associated with the credit card is the annual or monthly fee for using this form of credit. It can amount up to several hundred zlotys a year! So let’s check what fixed fees are associated with having a card.
Remember about safety!
When we choose a credit card, we must also remember about its security, If the card or its data get into the wrong hands, we can expose ourselves to considerable costs. We should always keep the card on our side. We should not use it for payment in suspicious stores and websites. We should also not photograph the card and publish it on the web.