Credit card loans

A credit card is a credit product, which means that the money you have on your credit card is not yours, it is borrowed. Such card is particularly useful at the end of the month when you are run out of money, or because it is advantageous as a means of payment.

The ABC of a credit card:

  •  credit card can be obtained from a bank or a non-bank financial institution;
  • a credit card loan is a short-term loan;
  • money from a credit card can be used for any purpose;
  • a credit card can be used to pay in shops;
  • a credit card can also be used to withdraw money from ATMs, but a fee is charged for such withdrawals;
  • a big advantage of a credit card is the interest-free period (30 to 50 days as a rule) during which no interest is charged on new purchases, provided that any outstanding balance is paid off on or before the last day of the interest-free period;
  • a monthly or annual fee is charged for a credit card even if the card is not used at all;
  • the interest rate is higher than the rate charged for a mortgage loan or consumer credit.

Important decisions to be made when choosing a credit card - see Six steps to consider when choosing a loan.