All about credit card

It is very much important to learn and understand much more about credit cards and this is considered to be the smart way in which banks offer potential clients loans but in a specialised way as compared to providing a loan. The terms and conditions of any bank when comparing offer for a loan versus offer for credit card are completely different which therefore means as an individual it is very much important to understand the difference. Credit card gives you instant access to money which you do not have nor earned, which simply means at the end of the day the money used must be paid within certain periods of time of which failure to pay will result in extra charges to be paid by credit card owner. 

Almost every individual in the working class is eligible to apply for a credit card but not everyone may qualify to have a credit card based on multiple factors. When the bank, it could be FNB, Standard bank or Netbank offers you a credit card, it is not an indication that you have money or you deserve to be given credit card. Bank consultants normally give potential clients calls to offer them an opportunity to do a check if you may qualify for a credit card by asking you several personal questions which in the end will determine the amount of credit you qualify. Most importantly, qualifying for lot of credit amount only indicates that you may be having less to pay from your earnings which results in you being able to pay more money as interest at the end of the month. 

When thinking about credit card, it sounds completely different from loan and less stressful as compared to loan but in the end when calculating the money spent and interest gained by the bank you notice how much money you have used as a result of credit card. What matters the most is to be able to determine if the money was spent on emergency or for entertainment. Credit card may be more tempting than a loan because with a loan you’re most likely to need a loan from the bank to use it for a specific or special purpose and in most cases most of the money goes to that specific or special purpose whereas less of the money may be diverted to unnecessary goods or services. 

With credit card you always never forget that you have buying power and the thinking also changes in a sense that you feel you can afford more by not taking into account that your savings are not enough to afford what you think you can afford without the help of the credit card. The moment credit card is in your possession it then becomes a habit for one to spent regularly especially when knowing that soon you will be getting money which can replace the money spent from the credit card. With all being explained, it is very much important that credit card be considered on in cases of emergency where there are not additional options to be considered.