Tips for obtaining and using credit and debit cards
Payment cards have become one of the most common ways of payment, and some experts even predict that in the near future they will fully substitute paper money. Choosing a right payment card is not an easy task, and in this article we will give you some advice on how to choose the payment card that best suits your needs.
1. Before you choose which payment card to choose, think of the purpose the card will be used for. Check the offers of different banks and choose the best solution for your needs – for example, for cash withdrawal use credit cards are not usually used because the withdrawal costs are higher than with the debit cards. Always keep in mind that the money spent by credit card has the highest fees and use it only when you absolutely have to.
3. Select the card with the lowest interest rate – interest rates on cards of different banks may vary significantly from 1, 4% to 3% on a monthly basis. This means that the annual interest rate is 16% – 36%
4. Select the card with the lowest maintenance fee – banks charge an annual fee for use of the card and it can vary considerably. Check the offers of different banks before making your choice.
5. Make sure that you can afford the allowed limit on a credit card. Do not increase your limit, just because your bank offers this option or because you know that you can spend it.
6. Repay the entire credit card debt each month in order to avoid high interest. If you cannot repay the entire amount of the debt, at least pay more than the minimum amount each month. The possibility of paying only the minimum amount of debt can seem very tempting, but it can be viewed as a sort of a trap. If you only pay the minimum amount each month, it could take years to repay the debt in full, assuming that you no longer use the card.
7. Avoid using more than one credit card – even if you do not use all the cards in your possession, you will pay the annual fee for them, and when that money sums up, it can represent a quite high expense on annual level.
8. Familiarize yourself with your responsibility in the event of card loss or identity theft – keep in mind that some cards do not include the insurance in case of loss. This means that if someone misuses your credit card, you will be responsible for all costs incurred. In case your credit or debit card is stolen, make sure to report the theft to the police and notify your bank immediately, so that the card and the account connected with it can be blocked.