A credit card, when used correctly can help you save and enjoy its rewards.

Since credit rating isn't that much a concern here in our country, one of the things that a credit card can offer is the convenience of purchasing something without using your own money. However, if you mess up big time utilizing a credit card it can create a huge problem in the long run. Learning how to use it wisely can definitely help you out in the future.

WHAT IS A CREDIT CARD?

 

Credit card is a devil's advocate in a form of a plastic card used by banks to lure poor people to borrow from them. Promising that it can save some money but in the end they become more and more in debt. - From one of the people that I called few years ago when I was a collector.

Kidding aside according to google search.

"a small plastic card issued by a bank, business, etc., allowing the holder to purchase goods or services on credit."

When the bank approves your application to have a credit card they are giving you a right to borrow money from them. As long as you are abiding in the laws, your purchases will be your OWN responsibility and the bank would not even care how you use it. Not unless there are some irregularities found based in their system. ( Which I might discuss in the future. )

You are required to pay either the minimum amount due or the total amount due after the bills has been generated.

The minimum amount due is just a small percentage of your total balance. Paying it can assure you that you can still use the credit card as long as you are not hitting the credit limit.

Total amount due on the other hand is the total amount that you owe for the billing cycle.

Is it costly to have a credit card?

Somehow yes it is depending on your payment and spending pattern. There's some fees that are involved when you use a credit card and some of them can easily be avoided as long as you pay them.

Late Payment Charge - If a customer missed out paying at least the minimum amount automatically they are charged with late payment fee.

Interest Rates - Depending on the terms and conditions on your card. The bank will be charging you an interest fee if the customer can't pay the total amount owed.

Annual Fee/ Anniversary Fee - Usually there's a benefit or reward on having such fees like discounts, added points in your card etc. However, if there's no such thing as rewards it can be one of the reasons why a card will be closed via request by a card holder.

 

Foreign Transaction Fees - If you use your card or made a purchase online outside your country you will be charge with it. Depending on your bank on how much is the percentage per transaction.

 

Balance Transfer Fees - it is a fee involved when you transfer a credit balance from one credit card to another.

Some banks offer a program wherein you will not be charged with some of the fees like Late Payment, Interest Rates, Annual Fee and Balance Transfer depending on how you pay your credit card balance and it is important that if you are having an issue handling it I'd suggest that you let your bank know. ( So that your Account Manager will know what they can do to help you out on your scenario )

Why you should avail for a credit card?

Though, there may be fees that are involved if you will be using a credit card here are some reasons why you should get one.

Rewards and Points - Some shops give points when you purchase something with a credit card over cash. You can trade those points into discount coupons or even a free item once you have accumulated the required amount.

Cashbacks - Some bank are offering cash back rebate for the purchases that you did using their credit card. The percentage varies from banks.

Discounts - Using a credit card on a partner establishment can give you discount from your purchases automatically. You can check an example here.

Social Status Symbol - here in the Philippines, if you own a credit card "some" people may think that you are rich there is a joke here that rich people doesn't have any paper money on their wallet but they do have credit card instead.

Getting a credit card isn't that much a problem nowadays as long as you can present the proper documents needed by the bank. However, if your spending pattern isn't that good and also how you pay your bills and the earnings that you are getting each month I'd suggest that you stay away in the meantime and think twice or thrice before getting one. <br /><center><hr/><em>Posted from my blog with <a href='https://wordpress.org/plugins/steempress/'>SteemPress</a> : https://puritostories.xopus.io/?p=69 </em><hr/></center>