Credit cards are one of the cards that you must learn to use if you want to integrate into life in America. Understanding how to use it and the benefits it brings to you will make “Getting Rich” easier because you can borrow money to work very easily.
What is a credit card that affects your finances?
Is a plastic or metal card that gives you the right to borrow money from the card issuer immediately to make purchases. Every time you use your card to “Ca” when shopping, going to the market, repairing a car, etc., it means you borrow money from the bank. You must then pay back all or part of the loan amount before the bank’s specified date.
Viewing: What is a credit card
How do credit cards work?
After you submit the credit card application, the bank will decide whether to grant you a card or refuse it. If you are issued a card, you will have a credit limit to be used for spending. The credit level of the card is high or low depending on your income, the number of credit cards you have, and the amount of debt you have.
In the US, there are four payment systems: Visa, Mastercard, Discover, and American Express. When you open a card, you should pay attention to which system you belong to because a bank can issue many credit cards of 2 payment systems. After you have used your credit card to borrow money for shopping, you have to pay it back to the bank.
The bank will give you a grace period to pay back the money without interest if you pay it off. For example, if you use your card to go to the market to buy fish sauce at the beginning of August, by the beginning of September, the bank will send you a bank statement and you need to check to notify the bank if there are errors:
Total amount borrowed The date you have to pay it back: 25 -28 days from the date of the notice (due day)Minimum payment Card activities such as date, loan amount, place of card
After using your credit card for a while, the bank will send a report to the credit rating company so they can assess your financial condition and issue you a credit score.
From there, if you want to borrow money for a business, buy a car or buy a house, the bank will rely on your credit report and credit score to decide how much to lend with high or low interest rates. That’s why I said that if I want to “Get Rich” in the US, I have to use a credit card.
Types of credit cards
Depending on your conditions and tactics, you can choose a credit card for each goal such as cash reward, travel, airline, hotel card. ) store (store). Each type of credit card has different benefits and different uses as follows.
Travel card: if you intend to travel, you must open this card to ensure safety and not pay fees when swiping the card in another country. If you use other cards to check, there may be a fee of $1 to $3 or 5%. Currently, I have cards of all the cards I mentioned above and every 4 months I will open 1 more card to earn $200 bonus. If you know how to play with credit cards, making $2000 a year is very easy. And after you have many cards, you will find that you can borrow $100,000 without having to ask anyone.
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The benefits of using credit cards
Using the first credit card is safe because you don’t have cash with you and if you lose your card, just let them know so they can send you a new card. The money is in the bank’s card, so if you lose money, you tell them they will protect you.
Ongoing reward: Currently, most credit cards have a program that rewards points or 2% of your monthly spending. The tactic of using this card is that you spend anyway for necessities such as food, gas, and cars, so why not use a credit card to get rewarded. Having a credit report: Using a credit card makes it easier for you to borrow money to do business, business or buy a house because of your credit record. Interest-free business loans using credit cards: there are some credit cards that will give you 0% interest for the first 15-18 months of opening the card if you pay a low payment (minimum pay ment). ). For example, if you have a credit card that gives you $15,000, you can use $10,000 to run your business and pay the smallest amount each month without paying interest during this 0% period. Or you can use the “grace period” to not respond.
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Fees for using credit cards
If you use a credit card and pay it off at the end of each month, there are no fees, but you can earn extra bonuses for travel, or investment. However, if you do not know how to manage your personal finances, it will easily lead to excessive credit card use leading to credit card debt, which is very dangerous.
Credit card debt is the most difficult debt to repay because the interest is very high. Interest rates can range from 17.24% to 25.24%. So you have to be very careful when using credit cards to shop because you will easily get addicted and spend with the card very well because there is no feeling of regret. When using a credit card, there are some cards that you have to add an annual fee, a fee for using the card abroad, a late payment fee, etc., so you need to pay attention. To better understand you can read this article earn $2000 per year with a credit card, or how to open a credit card.