Credit cards are great allies for those who want to make purchases in installments and even concentrate all their debts in one place.
However, despite being used by a large part of the population, credit cards still raise certain doubts, such as: why should I use a credit card? What benefits can credit cards bring? This post will clarify each issue and show you why you should use credit cards.
What this article covers:
What are the benefits of using a credit card?
Before knowing more details and tips, the first thing you need to know are the benefits of using credit cards.
The credit card works as a “loan” granted by a financial institutionwhich allows you to make purchases and pay for them later.
With credit cards you can:
- Parceling your purchases, which allows you to buy something that would be out of your sight;
- Make payment for your purchase on a future, pre-established date;
- Be part of rewards programs on your card, such as miles;
- Choose the best date to make your purchases, based on the closing date of your invoice.
That is, the credit card will help you a lot, especially in specific moments of everyday life.
How do credit cards work?
As previously mentioned, credit cards work as a form of loan, where you make your purchases in installments and undertake to pay the installments on the date stipulated by the financial institution of your card.
The credit card limit varies according to your income, and can be increased over time, depending on the use of your card. With the credit card, it is also possible to participate in specific programs of your financial institution.
It is worth mentioning that, normally, the limit of your credit card is reset with the payments of invoices and installments of your purchases.
What are the fees and charges for credit cards?
Credit cards have some fees and charges, which are important to be checked when closing the contract with the financial institution. In general terms, we have:
- Annual Fee: A monthly fee is charged for maintaining your credit card. But not all institutions charge the annuity;
- Duplicate card: if there is a problem with your card, the duplicate will be charged;
Emergency credit: it is possible that you will be able to use the limit greater than that available on your credit card, but a fee will be charged for this;
- Withdrawal: the credit card has the option of withdrawing, but a fee is charged when the withdrawal is carried out, either in Brazil or abroad;
- Boleto payment: although it is possible to pay boletos with your credit card, it is necessary to check if there is any fee in these cases;
- Late bill: if your bill is late, you will be charged an interest rate, which is often high.
In this way, it is important to be aware of the fees and tariffs charged, so as not to be caught by surprise in the future.
How to choose the ideal credit card for me?
In order to choose the ideal credit card, it is essential that you analyze all the benefits that the credit card has, as well as find out what are all the fees and charges charged by it.
Put on the scale which type of card will be most advantageous in your situation. For example, if you travel frequently, cards that have mileage programs may be more attractive. However, if you only want a card for sporadic, everyday use, a card that does not charge an annual fee may be more beneficial.
What are the risks of using a credit card?
Despite all the benefits that we find in using a credit card, it can also present some risks, such as:
- By having a high limit, you can lose control of your finances, making purchases above what your monthly budget allows;
- Pay your invoice on time, so you don’t end up entering the card revolving, where interest rates are high;
- Do not pass on your card details to third parties to avoid fraud.
Now that you know what to do to avoid getting into trouble when using a credit card, put the tips into practice.
Credit cards can be villains in people’s lives, but it all depends on how you use them. When used with intelligence and limit, credit cards become good friends, which will save you at various times.