Credit card: what is it and how to get the most out of it?

Credit cards are means of payment that allow you to carry out financial operations, such as payment for goods or services. In addition, they generate various benefits, including access to discounts and promotions. We tell you everything you need to know about them to get the most out of them and how to pay lower interest.

What is a credit card?

A credit card is a means of payment or financial instrument that allows its owner to carry out operations such as purchases or cash withdrawals and pay them later. It is said to be credit because the money used in the transaction corresponds to a loan granted by the financial institution.

How is a credit card different from a debit card?

The main difference between a credit card and a debit card is the method of payment. In debit cards, the amount disbursed is deducted directly from the money that the holder has in the account associated with his card, that is, there is no debt.

On the other hand, in credit cards, the holder incurs a debt, since he requests a line of credit from the bank at a certain time to carry out his financial operations. This means that after the period has elapsed, the user pays the amount spent plus the additional charges agreed in the previously signed contract.

What are the requirements to obtain a credit card?

To obtain a credit card you must meet the following requirements:

• Be over 18 years old (be within the age range defined by the bank)
• Have a valid ID
• The last water or electricity bill
• Payment slip or receipt for fees
• Not be on the Infocorp defaulter list
• Be on the payroll for at least six months
• Income declaration fee receipt if you are an independent worker
• Have a good credit history.

The aforementioned requirements are referential and may vary between financial institutions.

What types of credit cards do banks offer?

Banks often use different classifications for their credit cards. They are generally associated with the credit line granted and its benefits. We have the following:

• Classic card
• Silver or silver card
• Gold or gold card
• Tarjeta platinum o signature o black

What types of payments are made when you have a credit card?

In addition to interest, when you have a credit card you must make payments related to the annual membership and credit life insurance.

Annual membership

Annual membership is a type of commission charged by banks for managing the benefits that are provided according to the type of card, such as, for example, the administration of reward programs (points or miles), etc.

Credit life insurance

Credit life insurance is insurance financial purpose that is pay the debts of a person with a credit card, personal loan or mortgage loan in the event of death, total and permanent disability due to an accident or illness. In this way, your family members will no longer be tied to debt.

What is the minimum payment?

The minimum credit card payment is understood as the smallest amount that must be paid to avoid late payments and delinquency. That is, it means paying the interest associated with the card and not the total debt.

What is the court date and what is the payment date?

• Cutoff date: It is the day that a new period ends and begins and the bank records everything you have spent.
• Payday limit: It is the last day you have to make the payment and not fall into default.

Benefits of having a credit card

Among the benefits of having a credit card are those mentioned below:

• Improve your credit history: Using it responsibly will allow you later to access cards with a higher balance or mortgage and vehicle loans.
• Online shopping: It allows you to make purchases online without leaving home.
• Cash handling reduction: It is a secure means of payment because it reduces the use of cash in your financial operations.
• Discounts and promotions: This means of payment usually enjoys various promotions in affiliated establishments, in which, in addition, its use allows to obtain points that are later exchanged with discounts or cash.
• Better control your expenses: Allow yourself to go into debt within your financial means.

How to pay less interest on my credit cards?

You can check which are the financial institutions that charge lower interest by entering the portal Costs and Performance of Financial Products of the SBS. Here’s how:

• Enter this link
• Choose the region where will you get the credit card
• In product, select credit card
• Select the terms
• Click on Consult