To choose a credit card, you need to understand the purpose for which it is issued: whether the potential holder is going to use his own funds, whether he wants to receive income from the amount of positive balance on the card account. Or the client is interested in a credit card in the narrow sense – without the possibility of using own funds. That’s what we’ll talk about today!
The Best Cards
In the first case the most suitable variants are those with the possibility to use own funds (debit card with overdraft), with interest accrual on the balance on the card account and free cash withdrawal at the expense of own funds. In the second case, you should pay special attention to the grace period and the interest rate. For those who need funds immediately, the most profitable products are instant issuance products. All the more so that such cards are usually issued on the basis of inexpensive cards Visa Instant Issue, Visa Electron, Maestro, etc. Less expensive, but usually more functional “classic” cards – Visa Classic (Visa) and their corresponding status MasterCard Standard (MasterCard Standard). A higher price is usually due to a number of additional services, such as free travel insurance, access to VIP-lounges of airports, participation in programs of special privileges, etc. American Express is less popular, but it can also be a convenient payment instrument and a source of borrowed funds for the owner.
Besides, the choice can be determined by the lifestyle of the holder and his adherence to the services of a particular airline, telephone operator or travel company. By choosing the right co-brand, the client can save significantly on the services offered by the bank’s partner company.
Popular Credit Cards
If you do a lot of shopping, it is better to choose cards with a large credit limit, cashback and discounts for buying certain items. And for those who travel a lot, the most important indicator will be the number of bonus miles. A list of benefits common to all cards:
- The amount of interest accrued on balances;
- Low cost or even free maintenance;
- Duration of the grace period.
The speed of getting the card is also important. Some banks offer credit cards on the same day you apply for them. And you can get it without going to the bank, because a courier will deliver it to your home.
The Most Popular Credit Cards
The best credit card for every consumer is different. Exactly the one that contains a combination of benefits, bonuses, favorable offers from the bank and the purpose for which it was worth applying for a credit card in the first place. When choosing, you can be guided by public opinion or choose the most advantageous card specifically for your needs. In any case, this question should not be approached too hastily, it is necessary to weigh everything carefully and think over. Look for the necessary information on the web, the online community often provides useful tips for beginners. And only after you have made your final choice, you can apply for a credit card.
A credit card is a very useful financial planning tool if you use it wisely. It allows you to pay with borrowed rather than your own money, which means you are actually getting a loan that is already approved under certain conditions.
Grace Period
Every credit card has a grace period, which is the time during which you can get back the money you spend without overpaying a penny. For example, if you spend, say, $20,000, you’ll get back exactly the same amount if you stay within your grace period. This is one of the main indicators on which you should focus when choosing, the range can vary greatly, amounting to a month, six months, and sometimes more. It is also very important to pay attention to the interest rate, because this is actually the cost of using the funds, the cost of the loan, which comes if a person does not make a payment during the grace period. Even if you plan to always repay on time, observing the interest-free period, it is recommended to take the card for which the interest rate is lower.
Finally, the determining parameter is the amount of the credit card itself, because it determines how much borrowed funds you may suddenly need.
Bottom Line
But that’s not all. Some credit cards not only allow you to use the bank’s funds, but also to accumulate cashback. That is, you pay for a purchase at the cash register with your credit card, and you get a percentage back. That is, sometimes it is more convenient to pay with a credit card, even if you have money on the debit card, and then just use the debit card to transfer the amount spent. Be sure to try to choose a card with a cashback – it’s just nice and profitable, you can accumulate quite significant amounts and then spend them as a nice bonus.
