A credit card is, by its name, a card that contains credit. This means that the card issued to the customer has a certain credit limit within which the cardholder can shop with the card. As with a debit card, purchases are not charged directly to the account but are transferred to an invoice sent to the customer on the due date chosen by the customer.
All card purchases are non-interest bearing until maturity. Thus, credit card purchases can be made free of charge within a certain time. Usually, this time period is 30-45 days depending on the date of your purchase.
If you do not pay the invoice in full by the due date, interest will then accrue on your purchases. The rate of credit cards depends on the card issuer and the type of card. You can find out more about the interest rates of different credit cards in our credit card comparison.
Payment of invoices
Your credit card will be billed monthly, including previous month’s purchases. You can either pay the invoice in full without interest running or, alternatively, make the minimum payment required on the invoice, leaving an open amount on the invoice and paying the interest on the next invoice.
Credit cards always have a minimum down payment, which must be paid every month. Usually, this minimum reduction is about 10% of the total amount of the invoice or at least 20-40 dollars.
Credit Card Charges
In addition to interest, your credit card may also include other charges. The most common of these is the annual fee and the account management fee.
The annual fee is often included in premium credit cards, which offer a wide variety of benefits. These benefits may include travel insurance, access to airport lounges, or various benefits for car rental or restaurant experiences. Premium cards often also don’t have a predefined credit line, so they are very flexible and are great for a business traveler, for example.
However, it is possible to obtain a wide range of credit cards without additional annual fees. These include, for example, Bank Good Finance Visa Card, which includes free travel insurance and a credit limit of up to $ 10,000.
The Account Maintenance Fee is again a small monthly payment and will normally come into effect when you have an interest-bearing credit on your card waiting to be paid. The monthly fee for an account is usually around USD 5 per month.
Various Credit Cards And Their Benefits
Everyone knows the most popular “credit card companies” like Visa and Mastercard. What is not so well known is that credit cards are available today for many departures. Cards have been tailored to suit a lot of travelers or a lot of motorists, for example, by combining them with useful benefits such as travel insurance or petrol benefits.
Therefore, it is often worthwhile to choose a credit card based on your benefits. So credit card interest is not always the first consideration when choosing a card, but rather a card that suits your needs. For example, if you travel a lot, free travel insurance, airport pick-up points and access to airport lounges will compensate for a slightly higher interest rate in the long run.
Who Can Apply for a Credit Card?
So who can apply for a credit card? Terms and conditions vary slightly between services, but the following conditions must generally be met in order to obtain a credit card:
- Minimum age 18 (however, many card companies require 20-24)
- No payment default entries
- Regular Monthly Revenue (The higher the credit line, the higher the revenue required)
- Finnish citizenship or permanent address in Finland
In some cases, you can apply for a credit card without a regular income. For example, as a student, it is possible to apply for a credit card if a certain number of credits is reached.