Loans and Credit Cards
You need to make various purchases each day, and you cannot wait till the end of the month when your salary comes in to make those purchases. Over the years, loan options have emerged to ensure you can get access to funds while you can then make repayments later.
Loans are a way to escape financial difficulties. Today, one popular extension is the credit card facility. It allows you to make purchases without necessarily having the funds in your account.
What Is A Credit Card?
A credit card is one of the forms of money lending. It allows the holder of a card to access a particular amount of credit. With the credit card, you can make purchases and conduct financial transactions until you reach the money limit. The cardholder must then repay the money spent either wholly or partly by way of bank deposit.
A credit card comes with some benefits, which include:
- By paying off money spent as at when due, it allows the cardholder to have extensive access to the transaction history which has taken place on the card and build a positive credit history.
- Credit cards come in handy in preventing online fraud when making purchases.
There might be opportunities for rewards. However, this is solely dependent on certain card usage conditions.
Types of Credit Cards
There are various types of credit cards. They include:
Balance Transfer Credit Cards
This credit card option allows you to roll over your current debt to a new card while enjoying no interest rate. However, this only lasts for a period between three to twenty-four months. Afterwards, any existing debt attracts the standard rate.
Interest-Free Credit Cards
This is a credit card that does not attract any interest. Usually, this is a useful option if you want to make a big purchase in the nearest period. Usually, you get to enjoy no interest for a period between three to twelve months. With this, you can make your purchase without attracting massive financial repayment obligations.
Rewards Credit Cards
This is a credit card that allows you to earn rewards for the money you spend. You can sometimes link this card to frequent flying programs.
Other credit cards include
- Frequent flyer credit cards
- No annual fee credit cards
- Travel credit cards
- Platinum credit cards
- Low-interest rate credit cards
Credit cards also have various payment platforms which include Mastercard and Visa. Before choosing any of these platforms, you should carefully assess factors like; the amount you spend per year, whether you have previous credit card debts, and the kind of reward you will probably make use of, among others.
However, note that as a stringent criterion, all lenders and financial brokers have to be licensed by the AISC, i.e. Australian Securities and Investments Commission.
Also, all institutions that are primarily into lending activities must hand over to you a guide, proposal, and disclosure document to enable you to make an informed financial decision. They must also declare their charge fee as well as their contact details to prevent any instance of fraud.