If you want to figure out what is the most convenient mean of payment in the modern world, you may read online some articles by renowned financial analysts and consultants on matters of private finances, technological changes in banking, innovations, particularly as it concerns spread of cutting edge Internet tools to banks operations.
Private credit card has two main advantages:
- a client may pay with available money;
- a client may pay with credit means within own credit line.
What are the benefits of a credit card with a preferential grace period? This card can be useful in many cases when you urgently need cash – either in supermarket on virtual shop. Instead of waiting for the next salary or borrowing money from friends or colleagues, you can use your credit card any time, since it always has access to a certain amount of money allowed to you by the bank.
For example, it is possible to pay for vacation and return the money spent on it during the next month, without paying a single percentage to the bank. When you have some problems with a debit (salary) card, the credit card becomes a real magical wand. This is especially true in foreign trips, where it’s wise to have a “backup” option at hand instead of hiding a bag with cash under the bed in case of emergency. Today, the credit card market is quite saturated: any bank will offer you a choice from two to 20 different options.
However, remember that any loan implies the payment of interest for its use and has a limited term. Interest is accumulated immediately after the loan is issued and this is extra money to pay back. Private credit card is a pleasant exception to this rule:
- The credit line is restarted on each occasion, and moreover, the client has an opportunity not to pay interest to the bank, naturally, under certain conditions.
- The second option is just called a preferential, or interest-free, period of lending. Here it’s essence: if while using the plastic you make a monthly minimum payment and return all the amount spent back until the end of the grace period, then interest on this amount is not charged. The amount of the grace period depends on the type of credit card, but on average it is 50-60 days.
Nota Bene! Banks can calculate free grace period from:
- the first day of each month;
- the next day after the monthly statement;
- the date of the first purchase on the plastic;
- the date of issue of the plastic;
- the date of activation of the plastic.
After all, there is no doubt that modern credit card is just a piece of plastics. This is powerful financial tool for regular and online payments.