When you have a steady job and a decent income, then you’d want to have a credit card that will be there for you when you need to pay for something. Some people opt for debit cards rather than credit. They both have their pros and cons, but most decide to get a credit card as the better option.
Although both are made of metal or plastic, they have a chip implemented inside that can be read by financial equipment, such as ATMs and POS terminals. The information read goes directly to the financial company and comes back with a signal that tells what’s written on the card. See how these things work on the link.
In this article, we’re talking about the kredittkort, or the credit card, and its benefits. We will explain in five points why people love them and why they frequently apply for a new one. If you want to know more about this matter, continue reading and see more about it for yourself.
1. Credit cards provide a grace payment period
When you pay with any other method, the funds from your account, or the cash you’re holding in your hand, disappear forever from your possession. A debit card will instantly take off the amount that you spent on an item, but that’s not the case with a credit card.
With it, you get to buy an item or service, but you’re not paying immediately for it. Better said, the vendor sees the money on their account, but you can always pull them back in case something unwanted happens. This is not a way to pull tricks and scam people, but only for emergencies.
For example, let’s say that you bought a new fridge, you come home, plug it in, and you see it’s not working. You call your bank and you tell them what happened. They will immediately stop the funds from being liquid and will only release them when you get a new fridge.
At the same time, you can use it for paying for an item that is too expensive and you don’t have the actual funds at the moment. You can get a new bike that’s worth $10,000, but only pay the next month when you have enough on your account balance.
The vendor will get their money through the financial company that issued the plastic, but you’re not going to spend a dime until you approve the payment. That makes it so easy to get whatever you want even if you don’t have a positive balance on your account.
2. Most issuers offer rewards for using it
One great way to make people use their cards frequently is to offer them rewards for doing it. Depending on the issuer, there might be different rewards that are more or less interesting. Some of the most popular ones are getting flying miles for free when you buy tickets through it, but there are many others too.
If you look at the Norske kredittkort deals especially, you’ll find lots of offers coming from supermarkets in the form of cashback. This is something that Scandinavians especially love, and if you also find it interesting, then be sure that you can have great fun by doing it.
The deal works for those that often put items on their credit card. The more you buy, the more points you collect and get qualified for some of the awards. It is the same with the cashback practice. For a specific amount placed on the card, you get several dollars back.
Some financial companies are especially generous, and they might offer up to 6% cashback, just to attract more users. The usual offer is around 2-3%, so if you find someone with a better deal, it means that you’re getting a great offer.
3. Fastest and cheapest loans come through them
When you need to borrow money for something, you don’t have to apply for a loan. You can put it on your card. The only issue is that not all of them can cover unlimited amounts. Most of them will go a few monthly paychecks, which means that amounts of 10-15 thousand dollars are going to be affordable. For more, you’ll need to ask the financial institution that you’re working with.
However, there are all kinds of different cards out there and you may have one that allows you to put all sorts of things on it. You can easily buy a brand new car and worry about nothing. You’ll repay monthly a sum that is enough to cover the expenses, and won’t even feel that you bought something.
It’s crucial to pay attention to the interest rate when you’re purchasing a new credit card. Every time you go into debt, your account will be charged with an interest rate for the time spent with your card in debt. If the interest rate is tremendously high, it makes no sense to get new things on it.
If the card has a low-interest rate, then you can get whatever you want at the moment, and pay for it when you have more income. Let’s say that you have an interest rate of 2%. An amount of $10,000 will not even feel like you’re losing money, so go for buying new stuff on it.
4. They are the safest payment option
Hackers are a true menace for credit cards. Every account is connected to the internet and all payments happen online, so it’s easy for hackers to intercept this information, infiltrate the accounts and spend money on their own.
Credit cards are excellent in the battle against them because they are made differently than debits, for example. When a hacker breaches inside and steals your money, you’ll alert the bank and they’ll block the account with the money inside before the hacking.
This way, both you and the hacker own the amount. The bank will notify the police of it, and the insurance company will compensate for the damage. That way, you’re not getting damaged, and the insurance company will fight the problem additionally.
When you have a debit card, the thief will clear it, and there’s nothing you can do about it. The mechanism is not the same and the funds cannot be reverted. What was spent is gone forever, and you can only alarm the police for this, and wait for them to catch the hacker so you can get your money back.
5. You can pay with them anywhere in the world
Credit cards are the best way to pay for anything and anywhere around the world. No matter where you go, your card will be accepted, and you can pay with it, or at least you can get local cash. In the US, no matter which one you own, be sure that the retailers will gladly accept to pass it through their POS.
Going abroad is always a problem for paying. Different countries always have their currencies and payment practices. Some places in the world simply have no POS systems, and you must have cash. Any bank will provide it when you show the credit card, which is why this is system is so valuable.