You probably also have a credit card, or you are looking for a reliable card. A credit card is a globally accepted payment method. You can use it to pay in restaurants, hotels and car rental companies. You can also pay with your credit card at web stores.
The purchases you make with the credit card must be paid afterwards. The amount is debited from your account at the end of the month. You may also have arranged with the issuer card that the amount spent is debited from your account in monthly installments. The worldwide acceptance and the possibility to pay afterwards if you now have the money unavailable, have made the credit card a popular payment method.
Advantages of the credit card
The credit card has several advantages: Have you made a purchase with a credit card at a web store? The purchases that you have made with your credit card are automatically insured.
Do you accidentally throw a cup of coffee over the keyboard of your new laptop? With the purchase insurance you get your money back up to 180 days after purchase. Some more expensive cards also have extensive travel and cancellation insurance, depending on whether you expect them to use them regularly, you can then adjust your choice accordingly. American Express, for example, has a particularly extensive package for the frequent traveler.
Secure payment method
Credit cards are a safe payment method. Nowadays every credit card has a pin code. Credit cards are therefore not susceptible to fraud. You can also pay securely with your credit card on the internet, because your credit card has a mobile app on which you receive a unique code.
Is something going wrong? You always get your money back. Moreover, you will receive a new credit card within 24 hours at no cost. All cards offered here also have the "contactless payment" function, useful for small quick spending.
Also suitable for saving
You can also save with a credit card. You get interest on savings when you deposit money on your credit card. However, do not think that you will get a huge percentage, at the time of writing, the reimbursement for a positive balance was only 0.3 percent. But always better than having to pay interest when the car is red.
Those who rent a car usually have to pay a high deposit. Do you have a credit card? Your credit card is used as a deposit. So you do not have to pay an amount in advance. Is something going wrong during the rental period? Only then will the landlord debit the amount (the deposit) from your account.
Handy on vacation
Your credit card is handy when traveling. Credit cards are therefore often used during holidays and business trips. You can use your credit card almost anywhere. Moreover, with toll gates, international bookings and foreign online shops you can often only pay with a credit card.
Did you buy something from an online store and did you pay with your credit card? Is the order not delivered or does the product appear to be defective? You then have a delivery guarantee. The supplier must then send you a new product. Does he not do that? Then you just get your money back.
Cons of the credit card
A credit card, like every financial product, also has its disadvantages:
Credit cards are not free. You always pay a fixed amount per year, even if you do not use the credit card. There are cheap and expensive credit cards. Expensive credit cards often offer additional insurance or exclusive benefits.
Do you have insufficient money to repay the pinned amount at the end of the month? Then you can pay the amount to be repaid in installments.
That seems like an advantage. However, it is a major drawback, because there is a good chance that you will then have to pay the statutory maximum rate of 14% interest. It is therefore not advisable to use this expensive installment plan to pay, because it is not unthinkable that you then get into debt.
Withdrawing cash is always expensive
With a credit card you can withdraw cash at an ATM. However, that is very expensive. For example, do you pin 20 euros? You then have to pay around 4 euros more. Therefore, only use cash with your regular debit card. After all, you do not have to pay any extra costs.
You need a regular income for Mastercard and Visa credit cards. This does not have to be a high income, everyone who has a job with an average income is eligible for a card. Depending on the level of your salary, you may opt for a credit card with a higher credit limit. You can choose from three cards for both Mastercard and Visa. The standard has a credit limit of € 2,500. The following is a 'gold card' with € 5,000 limit and the most expensive is the 'black card' with a limit of € 25,000.