Credit Card

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A credit card is a plastic cards composed of a magnetic stripe or a microchip and are a form of financing that allows cardholders to pay for products or services without the need for cash or checks. They can be issued by a bank or financial institution, a store or a service provider and have the ability to lend money to the owner in order for it to return said amount within 30 days without interest. If, at the end of the stipulated month, the cardholder does not pay the loan, the issuer of the card could charge a high percentage of interest to the user.

Unlike debit cards, a user can make payments or obtain money with a credit card without having to have funds in their bank’s current account at the time of transactions. It is also important to keep in mind that there is a credit limit that is specified in the card contract, although it may vary over time with the consent of both the issuing financial institution and the cardholder.

 

Two types of payment are contemplated: the monthly payment for the whole (that is, the realized cats are paid every 30 days) and the deferred payment (or “flexible fee”, in which the monthly amount is more reduced and allows the user to finance their purchases during the months that are agreed with the issuing entity). Finally, and to better understand this concept of accounting, it is essential to know that you should never use a it  to withdraw money from an ATM, unless there is a situation of force majeure.

 

Definition

A credit card is a financial instrument of payment, issued by a Bank or Savings Bank, which allows the cardholder to access a balance higher than the amount available in their current account. This money comes from a credit granted by the entity that the client must amortize according to the terms and conditions agreed through a contract previously.

Among the most used  in the world are VISA, MasterCard and American Express. To apply for it, it is necessary to be of legal age and present a proof of income and a certificate of the assets that the client owns, in such a way that it proves that it will be able to carry out the corresponding payments to face the credit lent by the entity.

 

What type of payments do they offer?

To make the pending payments you can choose between two possibilities:

  • The immediate amortization, which may be at the time of purchase or expense, or at the beginning of the following month.
  • Deferred payment, which may be stipulated in a fixed amount or in a monthly percentage, this type of charge entails the payment of additional interest.

Types

There are many types that can be grouped into the following 5 categories:

 

For young people: You can access them from 18 years old, in these cases they are generally known as the

For adults: The particularity of these is that you can access a greater amount of money than is taken into account. Within this type we find platinum and gold, which offer greater amounts to their holders and lower commissions, as well as other services such as higher coverage, entities usually offer them to VIP customers and have great international prestige.

For professionals: This type allows companies to make purchases of products and also facilitate administrative procedures, among the best known is the purhasing visa.

For over 60 years: Some types of banks or savings banks offer this product that is intended for people over 60 years and who have some advantages for holders such as discounts in establishments, travel or offer pensions.

Affiity Cards: These are credit or debit cards issued by an entity, which at the same time are linked to a company or association and offer discounts related to the associated entity, many of them are linked to ONG’S and at the same time they are used aid is being allocated to Non-Governmental Organizations.

 

Since credit cards offer a series of associated services, the entities that issue them charge a series of commissions that vary according to the services received.