What is a credit card? How to use them? How a credit card became an expenditure management tool for many people?... Let's find out answers to the above questions.
What is a credit card?
A credit card is type of "spend first, pay later" payment card. Accordingly, the issuing bank shall grant the cardholder a certain amount of expenditure, known as the card’s credit limit, depending on the financial situation and credit history of the cardholder.
Credit cards are divided into two types: Domestic credit cards and international credit cards. For domestic credit cards, the cardholder may only use them for domestic transactions; However, with international credit cards, cardholders may use for both domestic and international transactions.
Should I get a credit card?
Owning a credit card in modern society can be great for your financial well-being, therefore; you should open a credit card to enjoy the benefits that the card can bring:
Convenience: Let’s make a quick and simple comparison; it is obvious that a credit card is much smaller and more compact than a traditional purse or wallet. Also, if you are on business trip or traveling abroad and you want to pay for goods or services, or you need cash, you will need to bring cash in foreign currency, which is quite inconvenient and sometimes fails to fulfill your need due to the State Bank of Vietnam’s regulations on bringing foreign currencies overseas. Meanwhile, with an international credit card, you do not have to worry about these troubles.
Flexibility in spending: You want to buy an item but you don't have cash or have enough money in your account to buy it; that is the moment when a credit card becomes your lifesaver, when you just need to simply pay with your credit card, take the item home and pay the amount back to the bank after a certain number of days (maximum of 45 days) without interest. Ask the bank about the credit card account statement date for the smartest spending plan.
Effective tracking of expenses and payments: Every month, the card issuing bank shall send a detailed statement of the transactions you have made with the credit card including transaction amount, time and place of transaction, type of transaction ... thus the payment and expense management becomes much simpler and more convenient than using cash.
High safety and security: If you unluckily lose cash, there is little chance that you can get it back, however with a credit card, if it is stolen or lost, you only need to inform the bank and ask the bank to lock the card or manually lock the card via the application provided by the bank and feel completely secure because the card information and money in your card remains intact. You should also sign up for an automated message delivery service from the card issuing bank for better expense management.
Enjoy many incentives from the promotions: To encourage customers to use the credit card, many banks offer incentive programs, accumulate reward points, which associate with popular brands, shopping centers to give discounts to their card users. Owning a credit card, you can easily purchase products, use the entertainment and shopping services at a much lower preferential price than using cash.
How to safely use a credit card?
Select a reputable issuing bank: More and more banks are issuing credit cards to the market, therefore; customers have a lot of choices. However, with smart consumers, they often favor large and reputable banks. With brand reputation, stable operating history, a wide network of systems, diverse products and services, these banks will give you peace of mind to make your choice and at the same time bring the unique benefits and best customer service.
Do not disclose personal information: A good perception is that credit card is your money. Therefore, in no circumstances should personal information and information printed on your credit card be revealed. Do not let other people borrow your credit card; do not give the card, or hand it over to other people including bank staff to avoid the risk of disclosing confidential information; Always be extremely careful when dealing with merchants to make sure that others cannot copy your card information, which pose the risks of fraudulent transactions. When dealing at an ATM, carefully observe the area where the machine is located, the card reader slot, the keyboard area before making transactions; Do not execute transactions if abnormal signs are detected. You should not choose to make transactions at ATMs located at remote and isolated locations; Be careful when someone starts a conversation at an ATM; Cover keyboard when entering PIN code; Change PIN at least every 6 months and especially use the BSMS service to ensure that whenever a card transaction arises, the cardholder will be informed and take timely measures if there is a suspicious transaction.
Remember the payment due date: Everyone can forget the payment due date. In the short term, the penalty is not worrisome, but in the long run, it can be a big problem that can even put you into a debt cycle. Therefore, try to remember the credit card payment due date to ensure timely payment.
Make good use of promotion programs and earn reward points: You will not be able to make the most out of all the benefits of a credit card if you miss promotions and accumulated reward points. The promotion can be a discount when traveling, dining, hotels, exclusive shopping or direct cashback to the card account. Most issuers try to find the best promotions for you to use their products. Therefore please pay attention to make the best use of these programs.
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