A credit card is a tool for using money which is becoming more and more relevant every year. At the same time, it has already proven the status of a convenient and profitable banking product. A credit card with a grace period is the only tool allowing to borrow money almost free of charge.
Credit Card Usage Features
The card provides a financial reserve that you can use at any time. How many credit cards should I have? Kyle drummond, financial expert states “the most knowledgeable users of credit cards have two or three of them. They plan their personal or family budget as efficiently as possible using the right amount from the credit card”.
Additionally, a credit card can be a backup electronic wallet. The main thing to understand is that a credit card is a way to borrow money for a relatively short period. Therefore, it is advised to ask for the amount that you can return at the expense of several next salaries. The credit limit on the card can reach three average monthly salaries. The grace period is 60 days which applies to all card transactions and is renewable an unlimited number of times.
How Do I Get a Credit Card?
To increase your chances of getting the coveted credit card, you should follow a few simple rules. First of all, decide on your desires and the amount of income. You may choose a free “instant” card that you can get right at the bank’s office in a few minutes. Maybe it is more convenient for you, for example, to use numerous card services paying annual maintenance.
An analysis of your own capabilities will help you fill out the questionnaire correctly. If the desired credit limit does not match your income, the chance of getting rejected increases. In addition to filling out the questionnaire clearly, one of the most important factors in obtaining a credit card is credit history. When considering an application, any bank will analyze how the loan was paid, what is the amount of current loan obligations, etc.
How many credit cards should I have?
It all depends on your intentions. This will also determine not only the final decision of the bank but also the tariff, the type of card that the bank will be ready to offer you. There are several ways to find out your credit history. Online banking customers can get a report on their credit history very easily. The process takes its place on the Internet banking system in just a few minutes. This allows you to plan your financial relationships with banks, receiving lower interest rates on loans and special service terms.
In theory, there is no limit. The bankers themselves advise having a maximum of two credit cards. In this case, you can keep your expenses under control and avoid the temptation to spend more than you can afford. Those who cannot control their spending and are prone to impulsive spending should not open more than one credit card.
Don’t get carried away with credit cards! The more cards you have, the larger the aggregate credit limit on these cards. Consequently, the greater your calculated credit load according to the BCH (Credit Bureau). Even if all your credit cards are not actively used, BKI will consider 10% of your credit limit you spend monthly on servicing card debt. This can be the reason for the refusal of a consumer loan if you decide to get it.
What is the General Scheme of Receiving and Using a Credit Card?
At your request, the bank will issue you a credit card and set a credit limit. You will be able to dispose of this limit at your discretion throughout the entire validity period of the card. The minimum period is within two or three years. At the same time, you can spend a part of the credit limit or the entire credit limit.
In the same way, you can repay a loan. You decide whether to return the entire amount in full during the so-called grace period or to return the debt in parts but with interest. What will be the size of each of the loan payments, the customer chooses independently. Much depends on your financial capabilities. The main thing is to make the minimum monthly payment on time. As a rule, this is 10% of the used amount and less often – 5% plus interest.