• What is a credit card?

    Elina Huzina
    Elina Huzina
    February 18, 2013
    What is a credit card?

    A credit card is a bank plastic card, on which the bank charges the amount of the loan given to you. Using this card, you can use the allocated funds to pay for your expenses as long as you do not spend the full amount of the loan.

    Until recently, most of our compatriots did not know what a credit card is. Plastic cards in our country have been actively conquering space over the past seven to eight years. During this time, 120 million bank cards were issued, and almost half of them are credit cards.

    Credit Card Types

    The most common in Russia are - MasterCard Worldwide and VISA International. It is very convenient with their help to pay for purchases, services, or simply to receive cash at an ATM. However, funds from credit cards can not be transferred to other accounts in a cashless way. Credit cards may vary depending on the proposed terms of service, the level of opportunities and additional services:

    • classic (classic),
    • gold (gold),
    • platinum (platina),
    • electronic (electron).

    Credit Card Benefits

    If during the initial time of use (3 months - 1 year), you can prove that you strictly comply with the payment discipline, then the bank's trust increases. In this case, he is ready to raise the initial credit limit and provide a loan for a larger amount.

    Do not forget that such a credit card is a loan in essence. The money spent on the card will need to be refunded to the bank. It is possible to do this in part by paying each month an amount equal to the minimum payment. In this case, you have to pay interest for the use of the loan. They will be charged on the amount of debt since its inception and until you fully repay it. Usually, the minimum payment does not exceed 10% of the total debt; to this amount also accrued interest for using the loan is added. The amount of the minimum payment must be made within the period set by the bank - the payment period.

    The main advantage of a credit card is the grace period, the time during which no interest will be charged on the money that was taken on credit.If you have time to repay the loan funds before the grace period expires, you do not have to pay interest.

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