The 21st century offered so many benefits to improve the quality of life for all people on this planet. Technology got so advanced that now everyone can live the life they ever wanted without excuses. Even those who never had the luck to try some of the most fruitful products of the earth are now capable to do it.
The modern way of life requires a lot of work and enough income to make these things happen. Nothing comes free, and we all need to work hard to get the things we love in our lives. That means we must do our jobs daily. Still, it doesn’t mean that we can buy literally anything.
People who work ordinary daily jobs are not going to be able to buy planes or boats. They might be eligible for something smaller than they can afford, but not these kinds of gigantic things. Everyone who works from 9-5 will be able to buy most of the essentials they need.
Some however won’t settle for less than perfection and these essentials are not going to be enough. They will want more, but they won’t be able to afford these things. For them, there’s the payment method that is aiming for getting nearly anything they want.
There’s the kredittkort which can get them whatever they want. It’s a payment method that is different than the other modern types of payments. That’s what we’re talking about in this article – the payment method that is capable to provide nearly anything you want in a given moment.
What is a kredittkort?
A kredittkort is a payment method that is the most popular way of making payments today. It is a plastic or metal card that is given to a bank’s user to serve them for their needs. The card has limited funds that the user can work with freely as they want.
Depending on how big their income is, the limit will be higher. Additionally, the credit score of the account holder will determine the limit and the interest rates too. In general, everyone can go a few monthly paychecks in debt and use them as they wish.
For every cent spent, the cardholder agrees to pay interest. Luckily, this amount is not huge, unlike the amount that they have to pay when they ask for a personal loan. The interest rate of 12% on a personal loan of $100,000 will be enormous, but when you spend a couple of grand, the amount you need to return as interest is small enough to be accepted.
That’s why people accept using it. The downsides are not disastrous, while the benefits are enormous. You get to use money that you don’t have in moments when you absolutely need them. The bank won’t give you any trouble and won’t ask why you need this money, unlike when you ask for a loan. See here more about how loans function and see the difference.
When to apply for one?
Everyone with a steady job and a monthly income are eligible for getting one. However, not everyone with a steady job should apply for a credit card. One main reason not to apply is having a ton of other loans that need to be returned, and debt that makes your credit score disastrous.
When you have more loans, your credit score is going to be poor and a poor credit score will make the card issuer reject your application. If they accept, then be sure that they’ll ask for a high interest rate on every cent spent. It means that you’ll get a card under unsuitable terms, and you’ll lose a ton of money if you spend through it.
A lot of people are trying to get through the month and this is why they apply for the credit card. This is the worst-case scenario. Not having enough money to cope with other loans and asking for another one means that you’re drowning and going even deeper underwater. Don’t opt for a credit card if you have a big debt.
What are its benefits?
If you’re not stuck in debt, then you should opt for a credit card. Why? Because it can come in handy in moments when you need them. Let’s say that you make $4,500 per month. It means that after the bills, you’ll be left with some $2,000, and this is the amount you have every month to spend on things you want.
Seeing an item that’s worth $3,500 means you won’t have enough money right away unless you had them saved previously. The credit card will be there to help you in this kind of situation. You can feel free and buy it without worrying if you have the money or not.
Putting it on the credit card will allow you to own it right away but pay for it later. The bank that issued the card will charge only a part of the amount and will do the same over the next two or three months until you completely pay off the item that was worth more than your monthly saving.
Under great thing is the fact that credit cards allow you to pay for services later. In other words, if you have a contractor doing something for you in your home, and they don’t do a perfect job, you can withdraw the payment and only release it after they come back to fix it.
Things to be careful about
Just like anything else in the world, there are no benefits only. Some of the downsides are the interest rate and the ability to become stuck in debt if you can’t control the spending with the credit card.
The interest rate is relatively high compared to standard loans that are dedicated to some of the most common needs in life. However, the amounts on the kredittkort are too low to be taken too seriously, so people spend without worrying about this.
Another negative side is the fact that even credit cards have a limit that will not allow you to spend when you pass it. This limit means you went too far and after this, you’ll either get charged a tremendously high interest rate or your card will be blocked.
Those who are not capable to spend responsibly will be stuck in debt forever. Imagine having the income we mentioned and having a debt of $25,000. That’s nearly six times more than you earn every month. It will be hard to repay this debt, and the bank will keep ripping you off with interest rates.
Now you know everything about credit cards or the popular kredittkort. There are some amazing benefits, but there are negative aspects too. It’s not easy coping with it for everyone. Some people get addicted to shopping right away, so you must be prepared for all benefits and downsides.
With everything written above, it’s clear who should apply for a credit card. You can also think about your situation and see if it is the right time to ask for one. If you feel like you’re eligible and ready to do it, then you can see some great benefits.