The credit card is one of the most famous debt products, but whose operation is unknown to many of those who have one. In this guide you will find everything you need to know to better manage your credit card, as well as the myths and truths that exist around topics such as paying a fee or using them to earn points and miles . Let’s get started!
What is a credit cardA credit card is a line of credit (that is, a loan) that is permanent (that is, we do not have to go back and request it when we need it again) and revolving (that is, when we use it We deplete our credit and, as we pay, the card again has the same amount of credit available for new purchases). In other words, a credit card is a tool . This tool allows us to have money to make purchases and payments with the same ease as a debit card but with a big difference:
The money it contains is from the entity that gave us the card, not from us.Now, a credit card is not an extension of our income . It is not our own money that we can use without having to pay it later. Although it sounds obvious, it is an important distinction when we have to decide what is worth paying with cash (or debit card) and what is worth paying with credit.
What is the difference between a credit and debit cardRemember that a debit card is a card that you get when you open a savings account or a checking account (generally more in the former). Therefore, when paying with the debit card, you are paying with money that is yours and that is in your account. On the contrary, when you pay with a credit card you are paying with money that is not yours, but the bank that owns the card, and that you must return with interest within the term you choose at the time of passing it.
What are the requirements to obtain a credit cardAmong the documents that you will likely have to present to apply for a credit card are:
- Photocopy of your citizenship card (enlarged to 150%)
- Labor certification, if employed
- Payroll vouchers for the last 3 months, if employed.
- Income statement for the last year, in case of being independent.
- Extracts from the savings account (s) for the last 3 months, if independent.
- Credit card application form.