Charge credit cards with interest
Shop online, book flights, rent cars, all conveniently paid for with a plastic card. This is practical, but can be expensive afterwards if the card does not suit the owner's needs.
Because only cash is true - plastic cards have long been in the fast lane: meanwhile, every third German prefers to pay by card, according to a representative survey by the Allensbach Institute for Demoscopy. The reason: Anyone who wants to book a trip, a rental car or a hotel over the Internet usually needs a credit card. But what do the terms debit, prepaid, charge or credit card mean? We reveal who they are for and what risks they entail.
It is considered the "real" credit card and is also known as the revolving card - despite its name, only a few Germans use the credit card as their "credit card". Because: With it, a loan is really granted. This means that all card payments and cash withdrawals within the agreed credit card limit are billed monthly. As a rule, credit cards are only issued to customers who are in permanent employment with a high income and who have a very good credit rating.
Tip: If you are planning to get a real loan with the help of a credit card, Scherfling advises: "Loans via credit cards are often very expensive, so customers should think about other types of loan." Cheaper variants can be an installment loan or a credit line.
advantages: You can borrow money from the bank quickly and easily. In addition, there is often the option of a partial repayment. It is important to take a closer look, because there are bonus programs that can be worthwhile: For shopping fans and frequent travelers who accumulate high sales in the euro zone with their card, credit cards with a bonus program, for example, are suitable. Business travelers, for example, receive 1 point in the Miles & More bonus program for every euro they spend. These points can later be converted into free flights or upgrades, for example.
disadvantage: These loans are usually associated with high interest rates. The Stiftung Warentest even explicitly warns against the credit card: In contrast to the charge and debit card, only a partial amount is debited from the account - around only 5 to 25% of the amount actually due. You will then have to pay loan interest on the amount that you do not offset. With every further booking via the card, this loan amount increases immediately. Another danger: With monthly billing you can quickly lose track of your expenses and get into debt, criticize experts from Finanztest magazine. "If you already have such a card, you should always try to balance all total amounts at the end of the month," recommends Ralf Scherfling from the North Rhine-Westphalia consumer center. "It is simply possible to repay more than the contractually agreed monthly rate."
It is most common and widespread in Germany and is usually referred to simply as a "credit card". In Germany, Visa and Mastercard are the dominant providers for this card. The card offers a credit line without the option of paying in installments. Instead, an invoice is created every month for the amount that the customer actually has and now has to pay.
advantages: There is no interest on the loan while the payment is deferred. It pays to compare: In addition to the payment service, some providers also offer extras, for example free insurance or discounts. The charge card, like the credit card, is accepted as a means of payment almost all over the world. It is suitable for European travelers and occasional online shopping. If you travel a lot and shop online, it is better to use a classic credit card (see credit card).
disadvantage: There is no payment in installments. And for long-distance trips, customers pay for some credit cards to be exchanged in foreign currencies or to withdraw from ATMs. Anyone who withdraws money with the card in the USA, Thailand or North Africa, for example, must expect fees of five percent. A comparison is also worthwhile here: some card providers do not charge any currency exchange fees.
As with a giro card (EC card, Maestro, V-Pay), all card transactions with a debit credit card are debited directly from the credit card holder's giro account. There is no extra credit card limit, so no credit from the bank.
advantages: You have a good overview of your expenses.
disadvantage: The debit card is only partially suitable for people who like to travel often and on their own. Because the debit credit cards are sometimes not accepted as security when renting a rental car or booking a hotel room. The reason for this is the direct debiting, which is a problem when depositing a security deposit with a credit card. In other words, it is often not possible to “block” amounts, as is possible with credit and charge credit cards. However, if it is a VISA or Maestro debit card, there is a virtual credit limit and the card is still widely recognized.
This card does not give credit at all. It can only be used if you top up the card yourself with a credit balance. Payments are debited until the credit is used up.
advantages: The prepaid card is ideal for children and young people who are traveling abroad. "Parents can load money onto their cards from home if they don't have enough credit," explains Scherfling. It is also practical for freelancers and the self-employed, who often do not get a classic credit card because the provider requires a certain amount of money to be paid on a regular basis. You get it despite the SCHUFA entry: Most prepaid card companies do not ask for them before they issue the card.
disadvantage: The term prepaid is deceptive, warns Scherfling, because the customer does not expect to slip into the red: "In fact, some banks write in their terms and conditions that annual fees can lead to a minus." Consumers should ask their bank . “In addition, some prepaid cards surprise with an inactivity fee,” says the expert. This is what the customer has to pay if the card remains idle for too long.
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