Credit card – what is worth knowing about it?
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Credit card – what is worth knowing about it?

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Need a cash injection for unexpected expenses? Irregular incomings to your account make it difficult for you to manage your finances freely? A credit card is a good solution. In this way you will gain a limit for free use. Read the article and find out what exactly this payment instrument is. Learn about the advantages of credit cards, how to set them up and where to look for the best offers!

What exactly is a credit card?

Commonly, credit cards and debit cards are often confused with each other. However, they are two different payment cards. A debit card is attached to a personal account. It allows you to withdraw cash from ATMs, pay for purchases at stationary and online stores, and at merchants that have a payment terminal that supports contactless or traditional (chip or magnetic stripe reading) payments. However, you can only use the money you actually have accumulated in your account. When the limit reaches 0 PLN, the possibility of payment is automatically blocked.

A credit card works in a completely different way. It is a separate banking product. It allows you to use borrowed funds without debiting your personal account. To get one, you have to apply for a credit limit. Its amount is granted on the basis of the analysis of your creditworthiness. After signing the agreement, the money will be transferred to your credit account.

Remember that a credit card is designed primarily for non-cash transactions (online and in-store payments). Although it can work as an ATM card, cash withdrawals are quite expensive (banks often charge up to 10% commission).

The main advantages of having such a card

The main advantages of having a credit card are:

  1. Interest-free period ( grace period) – the time when the use of the credit limit is interest-free. The grace period is determined individually by the banks, but it may be as long as 50-60 days. In practice, this means an interest-free credit.
  2. Low interest rate – if you do not repay your credit card limit on time, the bank will charge you interest. However, it cannot be more than 4 times the NBP lombard rate (about 10%). With a cash loan, banks additionally charge fees for processing the application, granting the loan, and may apply other additional fees. This may increase the APR to over 20%.
  3. The loan is granted for a fixed period of time and is automatically renewed if the debt is repaid on time.
  4. The possibility of using safe non-cash transactions – a credit card (similarly as a debit card) enables you to pay for purchases and services in any point equipped with a payment terminal. This method of payment is also supported by online stores. Many banks allow you to use your credit card limit to pay current bills (electricity, gas, telephone, Internet etc.).

How to apply for a credit card?

You should submit an application at a bank branch or online (using e-banking or mobile application). After confirming your identity, the bank verifies your creditworthiness and your BIK history.

The bank may request an employment certificate, PIT 11 or PIT 40 form or other documents confirming the applicant’s regular income. On the basis of the assessment of creditworthiness, a credit limit is granted. The next step is signing the agreement and issuing a physical credit card.

Credit card – repayment

The repayment time of the borrowed money is specified in the agreement. Individual banks have their own interest-free periods. Most often users have about 60 days to settle the debt (30 days is the settlement period, and another 20-30 remain for repayment). The contract indicates the bank account number to which the money should be transferred. Remember that the bank will charge statutory interest for each day of delay, so regular repayments are essential to enjoy a cheap credit on the card.

Additional benefits, bonuses

Banks very often prepare attractive bonuses for credit card holders. Many offers include discounts for refueling at petrol stations or shopping at stationary and online stores of a network cooperating with a given bank (in some cases the discounts may reach up to several dozen percent of the amount spent). Another benefit is insurance against cash theft at ATMs.

Holders of platinum (VIP) cards can also count on e.g. VIP lounges at airports or very favorable interest rates on loans.

Where can I find bank accounts linked to a credit card?

A credit card is a stand-alone product, so it can be opened in any bank (without the need to have a personal account there). However, many people choose bank accountsand a credit card in one network. This works well, among other things, when applying for a credit on the card – then you do not need to provide additional documents, because the bank analyzes the current receipts to the account.

Main photo: material from the client

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