There are many types of cards in the market and credit cards include revolving cards, what are we talking about today. Let us begin!
What are Revolving cards?
Revolving cards are cards that offer consumer credit, that is, a payment instrument that allows us to postpone the purchases we make.
A priori they seem similar to traditional credit cards, but you have to be careful because they have a somewhat special operation.
It is a credit card that allows the holder the deferred payment through a fixed fee. In this way the holder will pay a fixed amount each month instead of having to pay all the capital at the time of liquidation.
What are their characteristics?
In the Revolving cards, the cardholder can spend regardless of the money he has in the account and then choose the monthly fee he wants to return from the money he has borrowed. Broadly speaking this means that the owner can decide what amount you want to pay, with the possibility of choosing between the total payment method or deferred payment.
They are cards that offer us a credit limit that we can have when we want, and which will decrease as we make the charges, and what will be replenished as we pay the periodic receipts.
These credit cards allow us to pay in installments and benefit from credit, which will remain available whenever – as we said – we are paying off the debt. In other words, as long as you pay you can maintain the line of credit without any problem.
It should be noted that in this type of cards it is very important to inform us of how we are going to amortize the debt, starting by choosing in what term.
- If we opt for full payment, whatever the date, we will not be charged interest.
- Otherwise, if we opt for payment in installments if interest will be generated, and we must be aware that they tend to be quite high.
If you are going to choose a Revolving card it is important that you consider all these details before hiring it, since it is not made for everyone. In fact, many ignorance end up suffering inconveniences, and there are few claims that there are.
What advantages and disadvantages do the Revolving cards offer?
As an advantage we will highlight that Revolving cards allow us to enjoy a line of credit and what they offer us the possibility of paying in installments. Basically we can access money that we do not have without the need to request a loan and we will obtain the capital in real time, that is, at the moment of making the payments we will have the balance to use it.
As for the payment of the loan, these cards allow the holder to decide what amount to pay and how to amortize the debt, that is, what can be chosen between the total payment method or the deferred payment.
As a great disadvantage, and we already commented at the beginning, we have to highlight the high interest charged for these loans if we choose to amortize the debt in installments. The credit offered by these cards can be very useful but we can also be presented with more than obvious risks, such as the possibility of ending up in debt without further ado.
Revolving card yes or no?
If you are looking for something more than a conventional credit card, Revolving cards may be your thing. However, we want you to be sure before making any decision, so before hiring, keep these points in mind.
- Analyze your options Before choosing a Revolving card, see if classic credit cards can offer you what you’re looking for. And of course, do not stay with the first option, but take your time to compare and decide.
- Hire it if you are going to use the credit card. It would be absurd to hire a credit card if you are not going to enjoy the line of credit offered. So if you are thinking about hiring one of these cards to face an unexpected charge, think if there is not a better way, such as asking for a loan.
- Be aware that you must pay for the credit. In case you do not want to pay interest for delay you will have to pay on the established date, since if you do not have enough then you will have to pay the interest payment.
Revolving cards are usually interest because minimum payments are more flexible and usually do not exceed 5% of the agreed credit. These cards are very widespread in the United States, although here in Spain it seems that they are not so well known and used.
What are the costs of credit cards?
Although they are differentiated by their particular operations Revolving cards in essence remain one more type of credit cards, and as such involve expenses that we must take charge. These charges are not only for using the card but also for having it, for maintaining it, for withdrawing the cash from the ATMs …
In short, like any card this implies some expenses that we must study before deciding whether to hire it or not. In case of doing so we will have to know the commissions that we will apply in each case, and among the main ones include:
- The commission for the issuance of the card. In many cases they will offer you a free card the first year, but then you will have to pay a maintenance fee
- The commission for renewal
- The commission for withdrawing cash from ATMs . You are likely to be offered a selection of ATMs to withdraw money for free with your credit card
- The commission uncovered
- The commission for the claim of non-payment
These are the main commissions that can be applied to our credit card, so it is advisable to have all the details before hiring it. Likewise, we will need to know the interests of credit cards, paying attention to the APR.