Having a credit card is synonymous with convenience. In addition to being an alternative to debit payment, the credit card allows you to pay interest-free purchases and also earns points in reward programs, which can be exchanged for various products and even airline miles.
However, this product should be used with caution. Many people decide to make a credit card and end up thinking they have gotten a salary extension. As a result, more than 70% of Brazilian household debt is concentrated on credit cards, according to the National Confederation of Trade in Goods, Services and Tourism (CNC).
To avoid falling into this trap, check out some important tips before making a credit card:
Make Credit Card – Which One is Best?
The main credit card options available are those linked to banks, department stores and hypermarkets. Bank-linked options are more generic and can be easily integrated with your checking account, making payment easier.
On the other hand, options linked to department stores and hypermarkets usually have some advantage to buy in the institution that offers them (discount on purchase, more time to pay the interest-free invoice).
To help you choose, learn about this tool that helps you compare credit cards available on the market.
Credit Card Making – What are the main advantages?
- Plan payments and earn a few days to effectively pay your purchases;
- Installment purchases without interest;
- Possibility to consolidate all expenses of the month in the same place;
- Earn points in the reward program, which can be redeemed for appliances, electronics and airline tickets;
- Shop online at international websites;
- It is possible to take monthly insurance to cover any amounts if you are robbed. On the other hand, there is no insurance for cash.
Credit Card Making – What are the main disadvantages?
- If you pay the minimum of the invoice on the due date, the interest on the residual value is among the highest in the market.
- Spending on impulse and without planning, you can end up accumulating a debt larger than you can afford;
- Some modalities offer very high annuities;
- There is always a chance that your card will be cloned, especially with increasing use in the virtual world.
Make Credit Card – What is the best way to use it?
- Choose the due date near your salary so as not to risk spending the invoice money with something else;
- Use theBank Guide to categorize your credit card charges automatically and find out where you are spending too much;
- Find out the best date to buy. It enables the longest time to pay the invoice;
- Using snowball spending targets, focus all possible credit card expenses to earn more points in the rewards program.