Banks vying with each other offer credit cards: make out as a gift when opening an account or placing a deposit, send by mail, accept applications for issuance via the Internet and in post offices. This variety is easy to get confused. Which credit card is better, and by what criteria should I choose a credit card?
Disposable or “revolving” credit cards
There are credit cards with a non-revolving credit limit, according to which you can withdraw the amount approved by the bank once. It’s more convenient to use a credit card on the principle of a “revolving” loan, according to which you can withdraw funds within the credit limit an unlimited number of times - spend part of the money, then pay off debt quickly and again access the full amount of the limit.
Features of determining the period of the grace period for which interest is not paid by each bank are different. Some banks apply the grace period for any operations with credit cards, some apply only to non-cash payments, and cash withdrawals are subject to interest from the first day.
The nuances of calculating the duration vary depending on the terms of the contract for a particular card. Some banks start the countdown from the moment of using the card, others - from the beginning of the month in which the money was spent. In the second case, the declared grace period of 50-55 days results in a lack of interest for only one month.
It should be understood that even if you managed to return most of the money spent on the card during the grace period, interest is calculated not on the balance of the debt, but on the entire amount that you used.
Regardless of the grace period, you must make a minimum payment on a monthly basis at a time specified by the bank so as not to pay a late fee.
The convenience of use
How convenient it is to use borrowed funds and pay off debt depends on the type of bank card. International Visa and MasterCard payment cards are accepted everywhere in POS-terminals of trade organizations, at ATMs, bank branches and electronic payment systems. A card that is not part of the international payment system may cause the holder problems with receiving cash and non-cash payments and settlements.
Pay attention to the size of the fees for withdrawing or accepting funds for various payment or cashing options. It is better to get money from the card and replenish it in the “native” issuing bank without paying a commission of 3-5% of the amount.
When ordering a credit card online, trying to save time, you can lose precious days waiting for delivery by mail. If you need a credit card urgently - consider options for obtaining an unnamed card or contact the bank where you hold savings or receive income to reduce the time for considering an application. Specify in advance how much you have to wait for receipt - a few hours or several weeks.
An important criterion for assessing the profitability of a credit card for borrowers remains the interest rate for the use of money outside the grace period. There is a certain pattern between the speed of consideration of the application, the volume of the package of documents for assessing the reliability of the owner and the rate set by the bank. Depending on the bank and credit card status, the rate varies between 20-40% per annum. If the issuer is only interested in a passport, it does not require a statement of income and a work record, does not check credit history, with a certain probability it can be judged that the rate will be significantly higher than the average.
Credit limit amount
If you choose a card by the maximum size of the credit limit, do not count on the approval of the entire amount at once. When you first contact the bank, it is possible to get a small limit of borrowed funds. With timely repayment and regular use in a few months, the bank will increase the limit on its own or your initiative. You can increase the available limit of funds at a bank where you are a client of a salary project or where you previously borrowed and repaid loans.
To pick up a credit card is not an easy task. To receive it, it is not enough to fill out the first application that appears on the Internet, it is worth carefully comparing the conditions of banks and only making decisions based on the information listed above.