Understand how credit card works
Good finance tells you all about credit cards: what types, rates, payment options and more!
The credit card allows the electronic payment of purchases, bills and services, all over abroad (international credit card) and is part of the daily lives of many people.
Anyone who is thinking of purchasing a card or already uses it and has doubts about how credit card works will find details about this electronic payment system here.
Credit Card: Understand how it works
Every card has a credit limit pre-approved by the bank and can be used in accredited establishments, that is, where it has “card machine”. Most shops now accept credit cards.
To have a credit card, it is not necessary to have a bank account. However, it is more common to release the credit card for those who are an account holder.
There are banks that offer the credit function in the debit card, allowing the consumer to use both functions (debit and credit) on a single card.
The stipulated limit for the credit card, in reais, is in accordance with the income and consumer behavior ( credit score score ). The total limit of the credit card can be used without rules, even, in a single purchase.
It is important to remember that credit card installments compromise the limit (partial or total, according to the amount spent on purchases), which is released after the payment of the invoice, usually within 2 business days.
Credit Card: Types and Fees
The Central Bank classifies the credit card into two categories :
- basic credit card , which is the one used only for payment of purchases, bills and services;
- differentiated credit card , which in addition to the function for payment, has benefits and / or rewards such as discounts on purchases, mileage programs, travel insurance, personalized service abroad, among others.
In relation to the tariffs that can be charged to the credit card, still according to the Central Bank, are the following:
- annuity ;
- issuance of duplicate of the card , for its use in the drawing of money, for its use for payment of bills (for example invoices and billing of products and services);
- request for emergency assessment of the credit limit .
Services considered “differentiated” by regulation may also be charged:
- sending an automatic message related to moving or posting to the payment account linked to the credit card;
- plastic credit card in customized format;
- provision of second-line credit card.
Credit Card: monthly statement
By means of a monthly statement (credit card invoice), the customer monitors all purchases made with the credit card, in addition to installments, fees and charges.
The following information should be included in your credit card statement:
- Full and available credit limit;
- Expenses incurred in the specified period;
- Indication of the portion being collected (in the case of installments purchases);
- Charges for services used, such as withdrawals with a credit card;
- Rate of interest of the revolving credit (minimum payment);
- Total Effective Cost (CET) of credit operations subject to hiring.
Credit Card: best day of purchase
The best day of purchase is known as the date when the next due invoice is closed, meaning new purchases will be charged on the subsequent invoice.
You need to do this tracking to plan your credit card expenses and avoid surprises.
But how do you know the best day to purchase your credit card? There is no rule. The only procedure that is the same for all credit card companies is that closing the invoice occurs days before it expires.
To find out what is the best day to purchase your credit card, contact your card administrator.