What you should know before contracting a credit card at the bank

by time news

Only in 2021 in Spain were 6,101 million operations with credit cards for an amount of 195,246 million euros, according to data from the Bank of Spain. This same entity also confirms that year after year the population’s interest in getting hold of this plastic increases. So much so that in the first quarter of 2022 the number of credit cards in circulation increased by 5.42% compared to the previous year.

In total there are some 39 million credit cards, a considerable amount, but what should the client know before hiring one? The experts of financial comparator HelpMyCash.com They warn about the main points to take into account before hiring one.

Beware of commissions

Having a plastic that allows you to buy on credit almost always requires paying two costs: on the one hand, there are the costs of issue and annual renewal, and, on the other hand, those related to the use of credit, that is, the payment postponed. “The only way to get a free credit card is hire one that does not charge annual commissions or issuance or renewal and avoid deferred or installment payments to any extent”, the experts underline.

The deferred payment if it is not at 0% APR is expensive. Credit cards generally allow several payment methods. One at the end of the month —the most appropriate to avoid paying interest—, and the fractionated or revolving. The latter authorizes payment in a specific series of months, as well as paying a fixed amount each month or a fixed percentage of the outstanding balance.

“If you choose the installment payment, it is important to understand that the interest calculated on the disposed credit will be charged on the monthly receipt, that is, on the amount that has been decided to defer. Make numbers and check that you can cope with the payment with interest It is the key so that the client does not go overboard, over-indebted and ends up paying dearly for the credit”, they advise from HelpMyCash.com

In today’s market, however, there are plastics that allow deferral of expenses at 0% APR. Of course, for the most part they do not allow the payment to be extended for more than three months. This is the case of the Wizink click card. this leaves pay for purchases in three months without interest or commissionsbut yes, only for purchases of between 85 and 1,000 euros.

another card that does not charge commission for opening or maintenance is the Open Credit of Openbank. But yes, to avoid paying for it you have to use it at least once a month or pay your salary or pension. The credit limit varies by applicant and offers free insurance that cover against travel accidents.

Control your expenses

Everything that is purchased will have to be returned. Controlling spending is the only way to avoid debt. The ideal would be not to spend more than you can pay and that translates into credit card fees being paid 100% in the same billing cycle.

According to experts, in today’s market the average interest charged by entities for deferred payment is 19%. 2Sometimes the credit limit may be higher than the monthly income. That is why it is optimal to stay within 30% of that limit. This will facilitate the payment”, warn the experts of the comparator.

Don’t forget the payment date

On the one hand, it is important that the client knows the cut-off date of your cardthat is, until the day of the month in which the bank closes the account with all the expenses that were made during the last month.

And on the other, that he knows what day is the payday limit. That is, the day on which you must pay the amount that was available during the last 30 days.

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