Credit Cards

A credit card is a convenient and profitable instrument for payments for goods and services. Credit cards have many advantages. In this article, we will consider the features of credit cards, the terms of their service and the benefits that you can get using such a card.

What is a credit card?

A credit card is a physical card that can be used to make purchases, pay bills or depending on the card, withdraw cash. The bank sets the limit based on the client’s solvency.

What benefits can a credit card bring you?

Credit cards have a number of undeniable advantages. Using such a card, you can pay for almost any product or service. Credit card holders enjoy discounts, bonuses and special offers from partner companies of the bank (airlines, shops, restaurants, travel companies). Some credit cards have a cashback function.

It is quite simple to get a credit card and the bank’s client only needs a minimum package of documents. You just need to have an ID, certificate of income, and a sample signature.

Also, one of the main advantages of a credit card is the so-called grace period, that is, the time during which interest on borrowed money is not charged. Thus, if you manage to repay the borrowed funds before the expiration of this period, then you do not need to pay interest.

What are the specific features of a credit card?

  1. A credit card is the most expensive lending instrument compared to interest rates on other instruments;
  2. Funds provided by the bank within the credit card limit do not imply material collateral. The only guarantor is the source of your income, which is why in order to receive a credit card, you must prove your income with a certificate from the place of work or a tax return;
  3. The funds provided by the bank do not imply mandatory targeted use and you can spend them at your discretion;
  4. To pay off credit card debt, the bank does not put you in the framework of a certain payment schedule. Of course, there are certain requirements and the bank allows you to choose the time of receiving the loan and the schedule of its repayment, thereby making the credit card the most flexible lending instrument.

What costs will the credit card holder face?

A credit card is a very convenient tool but it requires a responsible approach with extremely clear control over personal finances. If used correctly, it can bring you numerous benefits, and if abused, it can drive you into a financial trap.