Are you part of the credit card class? There are still many Portuguese who are afraid to use (or even acquire) this payment instrument, many doubts arise in the comparison between debt and credit.
However, we are all in favor of the new technologies, even those of the financial area, as evidenced by the Market Based Bank study, which states that in the last two years the number of individuals using a contactless technology credit and debit card more than doubled.
Are you ready to become a bully? Believe it is because we will present you with three good reasons to use the credit card instead of the debit card.
André was precisely one of the most medically-minded people on earth to use credit cards. Not only did he not use it, but he always rejected the idea of ever having one. Therefore, your purchases were always made with the debit.
On the day he needed a new TV in the living room, after a play of his nephews that went wrong (yes, they were playing paintball in the house), there was no money available in the current account for an LCD whose price was almost thousand euros He also did not want to mess with his savings that cost him so much to accumulate.
As he had no other method of payment and at that time no interest-free campaigns were in force, he could not buy his desired TV. Until the girlfriend, Anita, made available to make the purchase with the credit card (because women are braver than men in these things).
And it was then … that light was made in this struggle between debt and credit. The advantages of this method of payment were in sight … and are also in this article.
1. Enhanced anti-fraud protection
Just as a debit card is protected from fraud, so it is with your credit card if it is stolen.
If you steal a credit card and have made unauthorized payments with even before notify the bank, then support the value of this loss within the card ceiling and up to a maximum of 150 euros. However, if you immediately notify the financial institution of which you were the target, any unauthorized payments will not be borne by the customer.
In this way, you will only pay the losses of the payments made before you notify the bank. So our tip is: be very attentive to the card, always have the number of the same and the financial institution on hand to be able to request the cancellation as soon as possible.
This happened precisely to Anita with the credit card, and she immediately reported the situation and was compensated for all fraudulent purchases. Thankfully it was not your debit card that was stolen, otherwise you could never have paid rent on the apartment that month.
Moreover, nowadays, credit cards also come equipped with EMV technology, which makes it difficult for fraud to occur.
Discover: How to avoid being a victim of credit card fraud?
2. Good Credit History: Needed
Credit cards, when used properly, help build a good credit history and contribute to a Credit Responsibility Map (CRC) that any bank wants for its customers.
First of all, what do you need a history for? If you have never had any credit, the probability of getting one is very difficult. If, on the other hand, you have had and always made payments on time, the chances of getting more funding are significant. Especially for young adults, it is very important to start sowing to later reap the rewards.
Read more: How does credit card payment work?
In André’s case, he made small purchases with the card (the hotel’s when he went on holiday last month and the equipment of the team he wanted to acquire when Portugal won the Euro 2016, for example) so that he could later be able to borrow a loan for something bigger, as is the case of the mortgage loan you will need for the apartment in Famalicão.
The longer it takes to make this decision and gain courage, the worse it will be for you. And in the same way that this history favors you in acquiring new loans, you will still benefit from the interest rates you can get from the financial institution. Between debit and credit, only the latter allows to prepare the future.
Learn: How to benefit from more attractive interest rates?
3. Debt and credit: because what is earned is due
With credit cards it’s like this: the more you use, the more you get rewarded, which is a great incentive (unlike debit cards). By choosing the right card, you can have cashback (receive a percentage of your monthly spending) and even air miles that will give you the vacation you both want, something that does not happen with a debit card.
André, as a travel buff and often his salary and expenses do not allow him to feed this passion, adhered precisely to a card that gave both benefits referred to: the Best Gold American Express, which offers 40 thousand airline miles or 20 euros in cashback at the time of accession. But there are many others, now compare:
But pay attention to this advice that is worth gold: if you are building credit history, do not spend more than 20% or 30% of the available ceiling per month. This does not run the risk of over-indebtedness and looks good in the figure before the financial institution.
There are still those who have points programs to accumulate (for example: one euro = one point) and then exchange for goods or services (a relaxing massage in a SPA or even a new smartphone ). There are also those who have travel insurance and associated insurance. An immense world of possibilities that many are unaware of.
The top 5 credit cards with points in Portugal
Having a credit card and living within the possibilities is perfectly possible – one aspect does not invalidate the other. Keeping the monthly budget is a matter of common sense and if you exceed this budget , the fault is certainly not the credit card, even because the decision also goes through making the payment of the debt at one time in the following month or payment in several installments, with the latter option involving interest. In this sense, it is also essential to compare the costs associated with the card.
If the advantages of this choice between debt and credit are greater than the disadvantages, why not? Is it now that you will gain courage like André and prepare the future for more important acquisitions – a car or, who knows, the first house?