Bank credit card
How to use a credit card
Credit cards are payment cards that allow the customer to pay for goods and services at the expense of the Bank. In the classical sense, credit cards do not provide for the presence of the client's own money on them. In Russia, such cards include debit cards with overdraft (the holder can use both their own and borrowed funds). According to experts, more than a third of the population uses overdraft cards.
What do I need to take a card?
When determining the credit limit, the Bank takes into account various characteristics of the future borrower: age, income level, credit history, etc. When issuing a card for the first time, banks usually do not set large credit limits. If the holder complies with the rules for using the credit card (mainly fulfills its obligations to repay the debt within the established time frame) and actively pays with it, the credit limit may be increased many times, either on the initiative of the Bank or at the request of the client. When making a decision to increase the limit, banks assess the nature of transactions performed. Often, you can take a credit card online.A typical operation should be the purchase of goods by card. Cash withdrawals on credit are not welcome (by the way, withdrawal fees are very high and can reach 5%, and therefore it is better to limit yourself to non-cash payments).
What is grace period?
It is also essential that the card has a grace period — a time period after making a purchase, during which you can reimburse expenses on the card, without paying interest on the use of borrowed funds.
A credit card should not be identified with a consumer loan. No Bank will issue a consumer loan for a loaf of bread, and with a credit card you can easily afford "bread on credit".
A credit card loan usually lasts no more than two years (unlike consumer loans, which can be issued for up to seven years). This period is determined by the obligation to repay monthly the amount not less than the established percentage of the debt (usually 5-10%) plus accrued commissions and interest. Failure to pay the minimum payment is a violation of the agreement, delay, and damage to the credit history.