A credit card is essential since it allows you to buy goods and services. It is a borrowing tool that allows you to get funds when you do not have them in your account and repay them at the end of the month. There comes a time you lack money left in your account. Instead of borrowing your friends, you can hide the shame by borrowing your card. We shall see how to get cash from credit card without charges shortly.
There are various ways you can use your credit card. The most used one is buying goods and services. You can visit a supermarket, a filling station, a restaurant, or a flight company and buy goods and services using the card. The card is convenient since you have to tap or swipe to pay. It also allows you to pay online, whereby you have to provide your card number, the CVV, and the card’s expiry date.
Credit cards and all other payment cards save you from the dangers of carrying cash in your pockets, briefcase, or purse. If you lose cash, you lose it completely, but your money is still safe if you lose your card. You can lock the card, and if by any chance someone uses it to buy online, you will not be liable for the illegal transactions since the cards usually have Zero Liability protection.
How to apply for a credit card?
Depending on your preferences and the laid down application procedures, you can apply for a credit card online or at a branch. When applying online, things are easy, as you can make the application right from your bed, couch, or when traveling. You only need to have all the requirements.
First of all, you should be at least 18 years old. That is the minimum age required for one to get a loan since they can make sound decisions on money usage. Also, you require a checking account. However, that does not apply to all financial companies. Some will issue you a credit card as long as you qualify. However, for a secured credit card for rebuilding credit, you should have a checking account where you will put the security deposit required for your credit card.
The requirements for opening a checking account include an identification document, Social Security Number, email address, physical address, and phone number. Your bank may require you to have an external bank or payment card to fund your account. When applying online, you should visit the website of the concerned issuer and then submit all the necessary documents. The same applies when applying at a branch whereby you have to give all the required documents and fill out the necessary forms.
How does a credit card operate?
A credit card is a revolving loan whereby you have to repay and borrow money. When you repay your debt at the end of every month, you can borrow again and again. Remember that since the card is a loan, you must repay your debt with some interest.
Usually, the issuers give a borrowing limit to every cardholder. Two main factors determine the limit of your card. The First one is your credit scores for unsecured credit cards. The more your FICO scores, the more your credit/borrowing limit and vice versa. The scores are numerical expressions to show an individual’s potential to repay a loan. The second aspect that determines your borrowing limit is the security deposit. The security deposit applies to secured credit cards, whereby the more you deposit, the more your limit.
When using your card, the card’s issuer usually reports your card’s usage to the credit bureaus. These include your repayment patterns, how you use your card, etc. Credit bureaus are bodies entrusted by the federal government to keep borrowers’ records for future reference. The bureaus also develop credit reports for all borrowers whose details exist in their database. You qualify for better cards with higher borrowing limits as you increase your scores.
What are the things to check when applying for a credit card?
Before getting the best credit card for your usage, there are various factors you should consider. They include the following.
i) Rewards
You can get cash back on a credit card when you purchase at certain outlets. That applies if your card issuer supports cash backs. Other rewards include points and miles. The rewards usually help you realize the value of money since you can redeem them and save some money. Therefore, getting a card that allows you to get rewards is a good choice.
ii) Fees
Some fees come with credit cards. They include monthly fees, annual fees, foreign transaction fees, late payment fees, etc. You should check the cards that have lower fees so that you can save a substantial amount of money.
iii) Credit score requirement
When applying for a credit card, it is always advisable to know your scores to know the right credit card to apply for. That will help you to avoid unnecessary hard inquiries. It is essential to check the card with the highest limit that matches your scores to benefit more.
iv) Interest rates
Interest rates are the extra amount of money you pay on the borrowed amount. It is essential to get a credit card with low-interest rates so as not to pay a lot of money. When the issuers charge you interest rates, they can earn from the service they give.
v) Customization
Everyone wants a card that looks exactly how they want. If a card is customizable, you can decide how you want it to appear. You can add your photo or art to make it enjoyable.
How to get cash from your credit card without charges?
The money in a credit card is electronic. However, you may want to get cash from the card. Most of the ways used to get cash from a credit card usually charge cash advance fees. But there is a way to get money out of your card without parting with any fees. As per my research, the following is how you can get cash from your card without paying fees.
1) Buy a prepaid card
You can buy prepaid cards using your credit card. When you get your card, you can always use it anywhere where the card service provider is acceptable. Therefore, you can purchase a prepaid card for a particular amount.
Prepaid cards are payment tools that allow you to recharge and buy goods and services from various places. The cards operate like debit cards, only that they do not necessarily link to checking accounts. You can use the cards to withdraw finances at ATMs affiliated with the card issuer for free. Therefore, you eventually withdraw money from your credit card without paying fees.
Remember that you can also use credit cards to withdraw money at an ATM. However, the fees associated with the process are very high.
2) Buy goods and services for others
You can buy goods and services for others and get money from them. When purchasing goods and services at places that accept credit cards, you do not pay any fees for the money spent. Your friends then give you the money you have spent, and that is how you get money from your card, although indirectly.
What credit card do I get with bad credit?
You can also get a credit card specifically to build your credit or spend for your day-to-day transactions when you have bad credit. You can quickly get an instant credit card approval for bad credit with no deposit if you apply for the secured credit card and deposit the right amount in your card account.
A secured credit card is suitable to help you build your scores, and when they reach a specific limit, you can then apply for the unsecured card. The deposit you make then becomes available for use. As I mentioned earlier, your deposit amount determines your credit limit.
Another credit card type to use when you have bad credit is the unsecured credit card for bad scores. Issuers of such cards do not bother to check your scores since you already have bad scores anyway. Even though they charge high-interest rates, the cards can help you when you lack money. The cards also help you grow your scores and eventually qualify for better cards.
You can also avoid bad credit scores if you make timely payments, avoid using too much of your credit limit, and keep your credit card active. Having various credit cards is beneficial as many issuers report your card usage to the credit bureaus.
Bottom line
Credit cards are some of the best payment cards that allow you to borrow funds from your issuer in times of need. You can use your card to buy goods and services and withdraw at an ATM. You can get rewards from some card issuers when you purchase from certain outlets. There are two categories of credit cards one can get today. They include secured and unsecured credit cards. Secured ones are best for building credit.
