2024-07-30 06:08:15
We know that a credit card sounds like “more money,” so it can sound very attractive to some people, especially if they don’t have the proper knowledge of what it really represents and how it should be used.
Although it helps to create a credit history, which means that you can obtain a larger loan in the future (for a house or a car), it is important to know how to manage it, because otherwise, it could harm you and send you to the credit bureau.
If you are thinking of purchasing a card, here we explain what you need to know about them!
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What is a credit card and how does it work?
A card, although it may seem like extra money, is not. It is in a way a form of loan that the bank gives you, since that money is not tangible in your account.
What will happen is that you will be able to spend that money through a plastic card, which you will later have to pay on your payment date.
One of the aspects you should take into account when purchasing a card is to know the plans, commissions, and whether it has an annual fee, as well as the interest rates that each bank handles.
In turn, the bank will perform an analysis of your credit history to verify your income, your ability to pay and – as the name suggests – review your history with other financial institutions. This will determine whether or not you are eligible for the card. If so, the credit capacity that will be released for you to use it will be known.
It is important that you clearly define what you are going to use your card for and that you keep track of your expenses, so that you can pay your card responsibly.
One of the benefits that cards offer you is that you can differentiate your purchases, of course, under an interest rate regime that each institution manages.
The cutoff date refers to the day when the bank totals everything you paid with your credit card, during a 30-day period. Usually, this date is always the same day of each month.
While the Payment date It is the last day you have to pay off your debt or make the minimum payment, generally 20 days after your cut-off date.
Tips for controlling your card
– Depending on the cut-off dates of each card, keep the vouchers of the purchases or transactions you make so that they can be used as a reference when you receive your account statement for that month.
– Recourse to the minimum payment should be considered as an exceptional practice or for emergency cases. Paying the minimum will only make It takes longer to settle your debtand you pay more interest. Since the payment is small, most of it goes to cover the interest and not the debt.
– If you see any name or charge that you apparently do not recognize on your account statement, check the company name that appears registered on the account. voucher compared to the trade name of some establishments.
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2024-07-30 06:08:15