It is a card issued by banks, which allows you to pay without cash or money in your account. In other words, a credit card is a payment alternative even if you do not have the money at the moment and it is much safer than carrying cash in the bag.
It is called a credit card because the money you use to make the purchase of goods and services you need belongs to a loan made by the bank or the financial institution that has given you the card.
It serves as a tool to buy now and pay later.
Unlike the debit card that is to buy and pay at the same time, as if it were cash.
Every credit card has a limit, which is the maximum you can spend every certain time. The limit of the card is issued by the bank according to your income report. If you want to expand the limit, you can do so by submitting an application and a higher income report.
Likewise, every card has a cut-off date and payment.
The cutoff date is the day of the month in which all your purchases made are counted. Meanwhile, the payment date is the day you have to pay the balance of your card.
Imagine that your cut date is the 14th of each month. Everything you spend before 14 (for example, from July 14 to August 13), you will have to pay no later than September 14, which would be your payment date. If you do not have the money to make the full payment or cash, you can make the minimum payment and interest will be charged.
What are the benefits of using the credit card?
- It is safer than cash, because in case of theft, you can report it and cancel it, in order to avoid the loss of your capital.
- It allows you to have a higher balance of cash that you have in your account, according to your level of income. This favors you because you can buy those products that you have longed for and allows you to pay later.
- You can get a good credit history. This will benefit you to have favorable responses from financial entities when wanting to buy a house, for example.
- In addition, comfort is key, as you will not have to have the money in your wallet or have thought in advance how much you will spend in the day, so you do not need cash.
- You will have more control since you will be able to manage the consumption limits and monthly withdrawals.
- You can have greater ease of payment in online purchases, purchases abroad and home purchases.