10 characteristics of credit cards
Credit cards are a financial or banking product, through which an automatically renewable loan is granted to the client, and which also presents certain particularities that should be known, to make better use of it and guarantee its enjoyment. cash.
Characteristics of a credit card
- Instant credit: Credit cards are a personal loans that is authorized for a specific amount, and that once the initial amount has been paid, in whole or in part, they allow the customer to have the amount paid again to make different payments in any of the affiliated stores, physical or virtual.
- Payment by installments: The most characteristic of a credit card is that, once approved, all payments made with the allocated amount will be payable in comfortable installments, that are monetarily adjusted to the card limit, terms and interest rates previously agreed by contract
- annual interest: Each financial institution establishes a specific amount that must be calculated on the total amount of the approved credit, and which represents the interest rate that the client pays for the benefit received from a loan. In the case of credit cards, this rate is usually annual and it depends on the limit of the card and the conditions of the bank or financial institution. If the interest rate is low, it translates into a benefit for the client, who will pay less for the minimum monthly payment and for the total payment of the debt.
- They generate special commissions: Another point of relevance that characterizes credit cards is that they generate commissions or special charges by the institution that grants them, whether they are by emisions costs, that is, by the delivery of personalized plastic, or for each payment made individually, including possible cash advances to your personal account.
- They have a limit: Each institution has special packages or types of credit cards, which vary according to some institutional criteria, and within these variations, each type of card presents a different amount or credit limit. This being one of the most definitive characteristics of a credit card, since it represents the maximum amount for which a customer can make payments to be executed later through the indicated quotas.
- They are affiliated with certain businesses: Also depending on the type of card, there are shops where you will be able, or will not be able, to make payments, since another detail that credit cards have is that must be accepted by the trade, which must be affiliated with the financial institution or the company that guarantees the credit card in order to make the respective charges. Although in general, all electronic points are affiliated with most credit cards, since it is the same banking institutions that handle the collections who approve the types of credit card for each client.
- They handle special promotions: This type of credit, in most institutions, can offer you, occasionally or permanently, additional benefits for your purchases, such as special discounts on select merchandise. Likewise, the advantages of having an instant credit translate into a long-term benefit.
- There are different types: In each financial institution there are different types of credit cards, which will vary according to different points. Thus, we have that credit cards are generally Visa either MasterCard, and within them you will find types: classic, golden, platinum, black, etc... Each one will present its own and special characteristics, such as: a higher limit, additional benefits and different from others, traveler miles, etc.
- Prior approval and activation required: As is typical of a financial product, its enjoyment requires a formal request and approval by the financial company, who will evaluate the conditions of the client and will establish the type and amount of the credit card to be assigned, if it is feasible for them; and the clients themselves will be in charge of carrying out the activation process, which is generally done remotely.
- They do not require a special key: And finally, most credit cards (with some exceptions) are specially characterized and differ from other types of cards, such as debit cards, because they do not require a password when making the payment in any of the authorized points.
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ENCICLOPEDIA DE CARACTERÍSTICAS (2023) 10 characteristics of credit cards, en 10caracteristicas.com. https://10caracteristicas.com/en/10-characteristics-of-credit-cards/ (Consultado el: 23-09-2023)
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