Sometimes it may happen that we need additional funds. Some people use a credit card then – it is convenient because they do not require having money on your bank account. However, using a credit card can also have its drawbacks, and an online loan may be an interesting alternative.
Almost everyone needed an extra injection of cash – for example when at the end of the month there was an offer to sell the product that we have long wanted to buy. In this situation, of course, you can use a credit card, but it’s worth considering whether there is a better solution, such as taking an online loan. What is worth knowing about both of these ways to obtain additional funds?
How does a credit card work?
What exactly is a credit card and how does it work? First of all, it is necessary to distinguish whether we are dealing with a debit or credit card. While both of them make it possible to pay the bill without the need to pay in cash, the difference lies in where we get the funds for our purchases in this case.
Well, in the case of a debit card it is simply money from our account; on the other hand, when it comes to credit cards, the funds are the property of the bank.
Therefore, using a credit card is a kind of obligation that must be paid off – depending on the type of contract and offer, banks provide for a different interest-free period. What is he about? The customer who repays the commitment made during this period will not incur additional costs for the use of a credit card.
Credit card: pros and cons of handling bank funds
It is worth realizing that using a credit card is practically no different from taking a loan from a bank. What does this mean in practice? First of all, you should carefully read the provisions of the contract, which contains the conditions for the possession and use of a credit card. It is worth paying special attention to the rules relating to the interest-free period, which is usually divided into two stages – the settlement cycle and the time of repayment of the liability.
The billing cycle usually lasts 30 days, and after its completion, the customer receives a card statement that contains a summary of all transactions. Generally, two amounts are listed – minimum and total. The minimum amount is the amount that the customer must settle within the period specified by the bank to confirm his solvency.
As you can guess, the total amount is the amount that the customer owes the bank and sooner or later he has to pay it back. At some point, however, a problem may arise – what if the customer repays only the minimum amount for some time? It turns out that the rest of the liability is usually charged with a very high-interest rate …
The payback period is generally two to four weeks from receipt of the card statement.
In addition, keep in mind that even if you don’t use a credit card, there are usually additional fees. So what are the advantages? For sure it is a convenient and quick way for additional funds, but unfortunately not without flaws.
Online loan – an alternative to a credit card?
It turns out that taking a loan can be as good as using a credit card, and in some cases – definitely better. What speaks for making this kind of commitment? First of all, taking a loan is very simple – just go to the website of the website, read all the terms of the contract carefully, and then complete the appropriate form.
In the case of Good Finance, The customer usually receives a response within a few minutes after verification of the data provided by him, as well as his credit history in Credit Checker registers and economic information offices. If the verification result is positive, the customer is presented with a contract, and after approval of its terms, the loan amount is transferred to the bank account number indicated by him.
It is worth noting that in the case of loans, the costs of incurring liabilities are presented much more clearly; You may find that the cost of an online loan will be lower than when using a credit card.
A particularly favorable offer has been prepared for its clients by Good Finance – guided by their needs, the company introduced an installment loan, and in the case of a short-term loan, modified the amount that old and new customers can get. In addition, Good Finance is extremely flexible – it is the customer who decides how much and for what period he wants to make a commitment, and in addition he immediately gets information about the total cost of the loan.
Credit card vs online loan
- First of all, it is important to realize that just having a credit card costs us some costs, even if we don’t use it. In turn, we pay the cost of an online loan only when we actually make a commitment – it’s definitely worth remembering.
- In the case of a credit card, we are facing a trap that is very easy to fall into – if we decide to pay back only the minimum amount at the very beginning, then the amount of interest may effectively discourage us from incurring any obligations in the future. On the other hand, in the case of online loans, the rules are clear and transparent – this is especially the case when it comes to Good Finance. The total cost of the commitment may also be significantly lower.
- Some people think that taking an online loan is more formal than using a credit card. It should be remembered, however, that formalities await us when we sign the contract with the bank, while a loan via the Internet can be obtained relatively quickly and in addition without visiting the facility.