How to Use a Credit Card – Complete Guide
The use of credit cards is becoming increasingly popular because it is practical and bring numerous benefits to the consumer.
If you do not already have a credit card, you have already been contacted by your bank to get one. If you already have, you’ve probably already received a call from your bank to review the conditions.
But do you know how to use a credit card? Let’s “trade for kids.”
Compare credit cards
What is a credit card?
Let’s start with the ABCs of credit cards so they fully understand how they work, what they do, and how to use a credit card consciously and safely, maximizing the benefits they have to provide it.
Using a credit card is a convenient, easy and flexible way of making payments that works like a small personal loan . That is, this type of card offers a ceiling, determined a priori by your bank, which you can use whenever you need without having to use your account to order.
How does a credit card work?
Imagine that you need to buy a quality television for the living room and for some reason you do not want to mess with the money you have in your checking account, choosing to use a credit card to pay for this one thousand euro investment.
First of all, you should check if your credit card has ceiling enough to be used.
Has? Perfect. Then you can use it to make your purchase.
But do you know what happens the moment you pass the credit card at the payment terminal? Simply put, it’s like you’re asking for a one-thousand euro loan to the bank, pledging to pay back within the stipulated time frame.
The money-back period can be extended, free of charge, for up to 50 days, in case the payment is made at 100%. If payment is made in installments, interest will be paid on the amount owed.
Learn more: Will you use a credit card for the first time? 5 Things you should know.
Do you know how to use a credit card?
In practice, using a credit card is easy. Just pass it in the terminal at the time of purchase et voilà , simple and fast. What many people do not know is how to use a credit card in a safe and conscious way.
Let’s assume you bought your television in May. He used his credit card to pay the thousand euros, and that month he had already used credit for grocery shopping where he spent 100 euros. In this case, you already have a credit of 1,100 euros that you will have to pay in full.
There are two ways you can use to pay your credit card: full payment (100%) or partial payment.
Total payment (100%)
To avoid charges with interest rates, you should opt, whenever possible, for the full payment (100%) of the balance used on the card within the deadline.
If you do not have the availability to pay the credit card at 100% you can opt for the partial payment method. However, if you choose this method, you will have interest added on the amount owed.
In this way, you can agree with the bank a time limit and a monthly amount or percentage to pay up to cover what you spent. The vast majority of institutions facilitate this management being possible to do it simply and quickly through apps or homebanking services.
Deepen: What is the minimum credit card payment?
As a rule, and in both payment modalities, the statement of the card is issued at the end of the month, being charged on this date the percentage of the amount defined by the customer. The amount of the balance which has been settled thus becomes available for use.
When joining your credit card, make sure you know all about terms and applicable interest rates so as not to be caught unawares.
How to use a credit card and what care should it take?
In addition to being a convenient, safe and accepted payment method worldwide, credit cards also offer you advantages when using them, such as: exclusive discounts, cashback, point or air miles programs, as well as various free insurance (travel, personal accident, theft or fraud, online shopping protection, among others).
These advantages depend on the type of credit card you choose. Therefore, it is important that you take into consideration your profile and needs when choosing the best card for you.
For example, if you are a person who likes to travel, probably a credit card with air miles is the most appropriate choice. However, if you shop online very often, discounted credit card may be the best option.
Simulate cards with airline miles
If your credit card includes access to discount programs you can always look for stores that offer some kind of benefit to consumers who use that card to make the purchase and thus enjoy a more competitive price for your television, for example .
Find out: What types of credit cards are there?
What care should I take when using credit cards?
It is necessary to take precautions in the use of the credit card, mainly to avoid the risk of fraud. Although almost all cards currently have EMV technology that can increase transaction security, there are a number of good practices that should not be overlooked.
Here are some tips on how to use a credit card safely:
- When you receive your credit card you must sign it on the back, destroy the old card and make sure you write down the code in a safe place (never next to the card itself) – or, better yet, remember it;
- Never lose your sight card. For example, when you go to the store to buy your LCD make sure you make the payment at the terminal in front of the employee. Making a copy of the magnetic stripe is very easy and takes a few minutes: it will not even count;
- Never give the complete card number, either by phone or by email, even if it is a company you trust;
- When shopping online , make sure you only use your card on trusted sites and make sure that the address of the store’s website starts with “https” instead of “http”. The “s” indicates that the connection is more secure.
- If you suspect you are being a victim of fraud , if you have lost your card or if it has been stolen , immediately report it to your bank.
Now that you’ve figured out how you can safely and conscientiously use a credit card, you can start getting the most out of your use.
In addition to security precautions, ensure that your credit card is used conscientiously to avoid accruing interest and commissions.