A credit card is the easiest way to borrow. And the most insidious. Because for many of us it seems that with a credit card in your pocket there is more money than it actually is. Do not have time to look back – as we find ourselves in a debt hole. For the most “I do not want.” Let’s figure out how to save wisely, pay wisely and choose a card with benefit for ourselves.
How to use a credit card?
A credit card is a reliable assistant that makes it possible to borrow money from a bank for any purpose. The credit limit is individual for each client, depending on his credit history and personal information. Functionality, in general, is useful: when the situation “a want-not-can-wait” has matured, I took it and borrowed it from the bank. Another thing is that you have to pay for such a “bear service”. Here such percentages pop up that beware.
Is it possible to use a credit card with benefit? Can! If wisely. Analyze nine conditions under which a bank lends money.
Interest rate The lower the better.
Grace period This is the term set by the bank (30-60 days), – clearly fixed or floating. By repaying your debt to the bank in a timely manner, you are exempted from interest. But here the principle of “Pan or gone.” What is the trick? Look: at first glance, the more days, the more profitable. But a grace period of, for example, 56 days is not always equal to 56 days. Because the funds must be returned, say, before the 25th day of the next month. This means that if the money was withdrawn on August 1, then in order to not accrue interest, funds must be returned before September 25. Now let’s calculate: 31 days of August + 25 days of September = 56 days. In this case, the grace period is indeed 56 days. But if you withdraw money from a credit card on August 24, then you still need to return the funds until September 25. In this case, 8 days of August + 25 days of September = 33 days. It’s 23 days less than stated by the bank. You’ll be late for at least one day, as if there was no “grace period” – pay interest at the full rate for the entire period.
Servicing a card account: Banks charge money for servicing. And it doesn’t matter whether you use the card or not, the cost of the service is set by the bank.
Credit limit: This is the amount that you borrow from the bank. If you have a good credit history, banks increase the limit. You can borrow a large amount.
Commission for cash withdrawals at ATM: Be prepared to “shell out” cash withdrawals from 0.5 to 5% of the amount received – this commission will be added to your debt.
Availability of cash-back: The essence of cashback is that from 1 to 5% of the money spent from the card is returned back to the account. This option is valid at gas stations or in retail chains. Pay by credit card is where there is a cashback, then you will be in the “plus”.
Automatic repayment of a loan: Often, banks offer to pay off debt by taking money from other accounts. Funds are withdrawn automatically; you don’t have to go to the bank.
Can I use a credit card as a debit card?
A debit card is one on whose account the amount of your personal savings is located: salary, money transfers, own replenishment and other income. You can spend as much as is stored on the card. Use it in other countries will not work, because the card has limited functionality. But credit card funds are the property of the bank, which lends to you at a certain percentage. Even abroad. But the bank twice withdraws interest – for a loan and for the transfer of us$ to currency.
How is a credit card different from a debit card? The debit does not have a grace period and interest rate. To repay the overdraft (loan), the bank sets a period of up to two months. If the card is issued to the borrower under the agreement, the overdraft amount is a fixed percentage of the salary. Or expressed in the amount of up to two salaries. Therefore, the functionality of a credit card is significantly different from a debit card. The difference is striking.
Why is a credit card dangerous?
If you opened a credit card for a rainy day, thoroughly study two questions.
What is hidden behind the grace period? It is good if the number of days is provided for during which you can use credit funds at a symbolic percentage. For example, at 0.01% per annum. However, study all tariffs in advance to make sure that the grace period does not have a large commission. Banks may charge a monthly service charge. And this is an alarming bell. Such a credit card (even if you haven’t used it) can force you to “minus” during the first month or quarter.
Unsuccessful card closure – what’s the catch?
Do not think that if you decided to say goodbye to a bank and paid off a credit card debt, then you closed your personal account. In fact, you remain a customer of the bank. It is important to find out from the bank employee whether there is a loan balance, and after its repayment, contact the bank branch with a request to close the account. This can also be done through online banking.
Which bank is more profitable to get a credit card?
Before you get a credit card, look at three points.
Credit limit: size of the limit in different banks depends on the size of your salary, credit history, age, availability of a salary card and more. If you have a small income, but no credit history, do not count on a large amount. But some banks meet the needs of borrowers: over time, they increase the credit limit if they see that your salary has increased or you are repaying debt payments on time.
Credit card: interest rate % The interest rate on credit cards varies. Before applying, study the conditions for issuing a card: how much you will have to pay for service per month or per year, what penalties are provided for violating the grace period. And yes. Some banks, in addition to the interest specified in the contract, also withdraw additional fees. Find out this moment.
Grace Period: During the grace period, you can use borrowed funds and not pay interest. The main thing is to pay off the debt on time. Check with the bank employee from which stage the grace period is calculated:
- it is counted from the first day of the month,
- from the moment of cash withdrawal
- or when buying a product.
It’s not easy to figure it out, but it’s in your own interests. So you protect yourself from unplanned interest payments.
How to get a credit card in PrivatBank?
There are two ways to register a PrivatBank credit card.
- Visit the bank → fill out the form → activate the card.
- Fill out an online registration form on the Internet → pick up a ready-made credit card from the bank office.
How to get a credit card in PrivatBank online?
- Go to the bank’s website → apply for registration → fill out the application form.
- Wait for a call from the operator → find out the solution. The application is checked within an hour.
- Pick up a credit card at a PrivatBank branch → activate a card at an ATM.
Where can I get a credit card online?
The traditional way of issuing and receiving a card requires the client to contact the bank branch. However, the process can be facilitated. Fill out an online application on the bank’s website or apply for a Debit card generator at online sites. Having studied the application, the bank representative will contact a potential client to agree on the date and method of delivery of the card (directly in the hands of courier delivery or receipt at the nearest branch). Delivery by mail is not carried out in India. The bank is required to personally identify the customer.
How much is a credit card issued?
Getting a credit card is a matter of minutes. Such a right is granted only to an adult citizen of India with a constant source of income. The bank will be required to provide a passport and identification code. Sometimes they require a certificate of income. This is a necessary measure when a large credit limit is set and guarantees of solvency of the client are needed.
For registered cards, the production time is 1-10 business days. During this time, the banking institution manages to:
- consider the application.
- process customer data.
- Develop an individual card number, code and security chip.
Can I transfer money from a credit card?
Yes, you can, but with a commission.
How to calculate credit card interest?
It is better to find out from a bank employee, but an approximate calculation can be made by the formula itself:
The amount of interest payable (amount outstanding at the reporting date) × interest rate × 365 days × the number of days of debt.
What is a revolving credit card?
A revolving credit line is the recovered amount in an account. That is, as soon as part of the loan is repaid, credit finance is again available for use. And so an infinite number of times.
The principle of operation of a revolving credit card is simple: paid off part of the debt – and use it again. And if you also fit in the grace period, do not pay interest at all. Profitable purchase!
What is credit card refinancing?
“Re” means repetition, and “financing” means receiving a loan. Bank lending is possible in order to pay off old debt on more favorable terms. Or to combine several loans into one.