Non-bank credit cards

Credit cards are increasingly found among Gideon customers. It is a very convenient tool and contrary to what many people think, safe. At first glance, a credit card may resemble a classic payment card, issued to a bank account, and a card to withdraw money from an ATM. One of the distinguishing features are the raised letters with which the name of the card owner is written. Credit card payments allow you to conveniently shop online – for example, buying airline tickets. Such cards are also necessary when, for example, we want to rent a car from a rental company.

Where does the money on the credit card come from?

They are made available to the card owner by the bank. The credit card is actually a loan. To receive it, the bank usually carries out a creditworthiness test. For regular bank customers who regularly record their personal account, a credit card can be issued without any additional formalities. We are then dealing with a simplified procedure. As with other loans, credit cards also reduce your creditworthiness.

A thing very appreciated by people using credit cards is the repayment date, deferred by 28 to 30 days, without interest. This means that using a credit card gives real savings to people who have money in their bank account. For a long time, they can be in interest-bearing bills, giving us more profit. When the due date for repayment of the credit card comes, the liability should be settled in the amount resulting from the settlement or in the minimum amount. If we do not do this, high interest rates will be charged.

The interest rate is calculated on the entire credit limit assigned to the card

For example, if the card was issued with a limit of USD 5,000 and only USD 200 was used, after the payment deadline, interest will accrue from USD 5,000. To avoid this situation, it is worth setting automatic repayment of the minimum amount of debt.

A credit card is not only a convenient, non-cash means of payment, but also a tool that offers many other amenities and functionalities. What? Many banks offer their credit cards, which are associated with numerous loyalty and rebate programs, available in stationary and online stores throughout the country. Paying for purchases with such a card in them, we can get a several percent discount. Its amount is individually determined by the partners, and information on this subject can be found on the website of your bank.

This is just one of the benefits. Another is that credit cards can provide us with free travel insurance throughout the world. This option is usually available for premium cards, also called gold or platinium. It is worth mentioning, however, that the costs associated with obtaining and servicing such a card are much higher than in the case of a premium card. Therefore, if we use a credit card only for everyday purchases, it is not worth in our opinion to opt for a gold card, for which we will not only pay more, but we will have to try more so that the fee in the following years will be zero percent. In this case, it is much better to have a normal card, without additional services, which we will not use anyway.

Is there any risk involved with using a credit card?

Unfortunately yes. However, they can easily be eliminated by following the basic security principles of using a credit card. First of all, do not share your card details with anyone. Number, expiry date and confidential CV code on the back. Knowledge of this information allows you to use the card to pay for online purchases. Even if the card is not physically in the person’s possession. To ensure full security, it is most convenient to stick the cvv code or blur it – of course after remembering. Of course, as with any financial commitment, a credit card requires some discipline.

It is necessary so as not to fall into debt by doing unreasonable purchases, in an amount significantly exceeding everyday possibilities. Among other things, for this reason, banks do not issue credit cards to anyone who applies for them. Each application is accompanied by a thorough financial analysis, combined with a study of creditworthiness and proposing individual repayment terms. They depend, inter alia, on the previous credit history in BIK, the amount of earnings, as well as the conditions adopted by a specific bank.

The credit card is usually issued for a period of 4 years. After this time, the card is exchanged for a new one. If the card is lost, stolen or damaged, it should be blocked by issuing an appropriate instruction in the transaction system or by submitting such an application to the bank’s hotline. For such circumstances, it’s always a good idea to have the helpline number stored on your mobile phone or handy notebook. The credit card can also be issued not in a standard design, but with a print chosen by the user. This allows you to make the image of the card unique and well recognizable. This is of great importance when we have a large collection of cards in our wallet and finding the right one takes us a lot of time.

What will you need to apply for a credit card?

In addition to standard address information, banks may ask you to provide information about your earnings. Workplace, employer contact details, earnings and expenses, as well as additional sources of income, such as mandate or specific work contracts. In addition, you will be asked to provide information on average monthly expenditure and ongoing credit obligations. Based on this data, the bank will decide to issue the card. In the case of credit cards with a relatively small limit, e.g. up to USD 2,000, it is usually not necessary to provide proof of income. However, they will be needed when we apply for a credit card with a high limit, above USD 5,000.