During this time, it “grew”, “evolved” and gained in its functionalities more and more new services and opportunities to be used by its owners. On average, every person in the world has about 3 credit cards from different financial organizations. It is this widespread popularity that can be attributed to the growing desire of the community to buy the goods they need right now and without the hassle of resting, studying and even healing with the amount of credit in their bank account.
Issuing of credit cards
Nowadays, almost anyone who wants a credit card can get a credit card. The main thing is to be under 65 years of age with at least a small salary, and to be a resident of the country with a permanent residence registration. The procedure for applying for and issuing a credit card is very simple: come to the bank you love, fill out a form with your basic information, and get the following plastic media with a certain amount of money in your account.
The first credit card limit is based on your ability to pay. It is understood that this indicator will also be taken into account here. Usually, the amount of your credit card is equal to three times your monthly income . This limit will remain on your card for 1 year, you can claim a higher amount later. If you have been “excellent” in dealing with your debt before then the bank will approve the increase to the amount you need. The limit can also be raised by the bank itself as your salary increases (provided you fully use the services of this creditor and are aware of your income).
Credit card categories
Credit card – This is the same financial product as regular consumer loans. However, due to its prestige, credit cards are relatively categorized as :
- Electron, Maestro – The lowest credit card niche with a limited amount of credit and few options. Usually, the bank charges little or no fee for using this type of credit card. Therefore, this category is sought after by its audience.
- Mass, Classic – a standard type of credit card, more popular than the first category, because their service is much more extensive.
- Platinum, Gold – The winners of this group can be called elite bank customers. They cost a lot more expensive than the two previous categories, but they differ with a higher credit limit and the ability to pay for purchases in the most unexpected places in the world.
There are several plastic card makers in the world. Each one has its own billing system owner. The most common are Visa, Discover, Master Card and American Express.
What are the benefits to the credit card user?
Credit cards have squeezed most of the consumer credit out of the popularity rating , all because of the range of benefits that come with using them.
- A credit card can be used to pay for any service or good, provided that the service point has the appropriate equipment, more often a terminal.
- When paying with a credit card, the holder continuously receives cash equivalent points in his bonus account. Of course, they cannot be withdrawn in cash, but they are easy to pay at the store.
- When traveling, you no longer have to carry a large sum of money, hide it or worry about keeping it. You will be able to pay by credit card anywhere in the world and to withdraw in cash in the national currency of the country you are traveling to.
- Every credit card has its own discount period – this is the period within which you can withdraw your borrowed funds and deposit them without paying annual interest. Typically, this period ranges from 25 to 100 days (different for each bank).
- If necessary, the credit card can be used in the same way as a regular plastic card (with zero credit limit). To do this, it is necessary that the credit on the card is fully covered, but that the money is ‘on the top’. Removing personal (not borrowing) funds from your credit card is free or for a token fee.
- Almost all modern banks have their own Internet banking system. It allows you to make any payments or transfers directly from your mobile device or laptop via internet connection. The credit card holder may enter the personal office of such internet bank and perform any payment transaction, apply for a credit or open a deposit.
Credit card repayment
One of the advantages of a credit card repayment mechanism is that a credit drawn up in this way is considered indefinite. In other words, the borrower does not have a minimum monthly payment, but simply charges a commission for using the money. If a credit card with an open debt is not replenished for a relatively long period of time, the commission for using the money will “eat” all the money remaining on the card. Later, your account will be blocked and your bank will be forced to sue. So, to avoid damaging your credit history, paying late payments and fines, just top up your card every month for at least an annual write-off.
This is one of the important aspects of using a credit card. If you have lost your wallet or it has been stolen from you, you can divorce it right away. With a credit card, everything is easy and secure : if it is lost or stolen, the fraudster will not be able to use it without knowing your unique PIN (the digital password required by an ATM or terminal each time you withdraw or make a payment). Therefore, you will need to block the card as soon as possible (by calling your bank’s hotline) and then get a new one at your nearest creditor’s office. In addition, the new card account will be identical to the previous one (with the same credit limit, debt, etc.).
To sum up, credit card has become an indispensable financial instrument that has become firmly established in our daily lives and continues to delight our owners with new opportunities. One can only hope that in the future the use of credit cards will become more accessible (lower service fee and bigger network of terminals, ATMs).