The credit card is designed for its holder to perform operations, settlements on which are carried out at the expense of funds provided by the bank to the client within the established limit in accordance with the terms of the credit agreement, i.e. operations are paid only at the expense of the credit. There is no possibility to perform operations at the expense of own funds on the credit cards. Credit card or cash? And today in this article we will find out what are the pros and cons of shopping with a credit card!
What Is A Grace Period on Credit Cards?
Customers of banks often ask – what is a grace period of a credit card? Actually, it is very simple. During this period the issuing bank does not charge for the use of borrowed funds, so it is otherwise called an interest-free period or grace period. Most banks start it from the moment you start using borrowed funds, but sometimes the starting point is the month of issue, date of activation or receipt of the card. To exclude the fee (charging interest) for the use of the loan you need to pay credit card debt on time, while staying within the grace period.
Grace Period
Credit card debt occurs after the grace period has expired, and the owner has not returned the spent funds. In this case, the financial institution charges interest, the amount of which is specified in the contract. Your bank notifies you 7-10 days before the expiry of the grace period by SMS and informs you about the amount owed. The interest-free period resumes after the credit card debt has been paid off and can last until the agreement expires.
Quite often when the card is first issued the issuers do not set the maximum credit limit at once, but in case of active use of borrowed funds and absence of delays on the loan on the basis of the holder’s request or at his own initiative can increase the limit. Also, the bank has the right to reduce it unilaterally. But if you are looking for the best card, then surely opt for Citi Card! Only here with login to citi card, you can find lots of benefits and opportunities to keep and withdraw your money!
Advantages and Disadvantages of Credit Cards
The pros and cons of credit cards can be seen in the video below. In brief, the pluses of the card are that you get credit to buy anything without any approvals, and if you pay off your debt on time (by keeping within the grace period), you won’t have any problems.
On the other hand, if you are not able to repay the debt during the grace period and pay it off with the minimum possible payments, then you lose a lot, because the interest on the card loan is very high. In addition, there may be penalties for late payments if you forget to pay.
In addition, there is a psychological aspect to this. It is much easier to spend money that is not your own, so people often spend all the money from a credit card on not very necessary things and services, which they would not buy with cash or a debit card. That’s the banks’ calculation.
What Are Credit Cards?
Payment systems offer users credit cards based on their social status and income. Each category has its own cards which determine the status of the holder.
Classic – the most affordable with a set of basic functions (payments for purchases, cashback, bill payments) and standard requirements, are issued to all holders by default.
Premium (Platinum, Gold, Signature) – open access to a variety of banking services, allow you to receive increased bonuses and enjoy special offers, among them:
- personal manager;
- access to VIP-lounges in airports;
- information service;
- individual insurance programs;
- concierge service and many others.
Cobranding is a joint product of a bank and its partner companies, which are often air carriers, mobile operators, gas stations and major retail chains.
Cobranding Cards
Such cards are the most advantageous for the holders who often purchase goods from the brands-issuers: they are awarded bonus points which are exchanged into Rubles. Types of co-branding cards:
- multi-brand – provide favorable terms from a group of companies of the same line of business;
- Affinity cards – intended for directing bonuses to social programs and charitable actions.
Advantages of Paying by Card
KPD
If you’re a business person, you know that all customers want their product fast. Working as a card object reduces service time-just swipe your finger, sign and go.
Easier Accounting
When you get paid by credit or debit, you have an automatic record of all purchases, which can eliminate the need for a lot of manual accounting.
Minuses of Paying by Card
Alienated Customers
Today’s customer expects to use cash almost anywhere and everywhere. Also, by not accepting cash, you will alienate some “unbanked” customers or those without access to a bank account.
Internet Security
Without cash, you eliminate the risk of robbery and theft on the spot. But fraud and security breaches are a legitimate concern for business owners.
Conclusion
The Bank’s credit card allows you to pay for goods and services using the Bank’s funds. There are many pros and cons to cards, but with a credit card, you no longer have to set aside money to buy things you need right now, or put off a purchase just because you don’t have the right amount on you. With a credit card, you can pay for your purchases immediately and pay them off later at a time that suits you, in full or in installments, as you see fit. It’s a more convenient way to pay because you don’t have to carry large amounts of cash with you in case of unexpected expenses!
