The interest rate on credit cards and payday loans cannot currently exceed 10 percent. per year. However, it should be remembered that the interest rate is not the only element included in the total loan amount.
Banks charge commissions for granting a payday loan, you also have to take into account additional costs (e.g. insurance or credit service fees) and fees for additional products (e.g. personal accounts). Today I will focus on payday loans and credit cards. In what situations should you use them?
Payday loan – when to use it?
Payday loan is one of the simplest and fastest solutions. He is reaching for people who need quick cash, which they can pay back at a convenient time. payday loans are granted in the amount of up to PLN 200,000, and they can be repaid for up to 120 months.
The maximum amount of credit a customer can receive depends on their creditworthiness. The quick receipt of the required cash is made possible by: the option of submitting an online application, a quick credit decision and minimum formalities (e.g. financing based on a customer statement)
You can also document your income based on your bank statement with salary receipts or an employment contract scan. The payday loan is granted for any purpose – the bank is not interested in whether you will spend the money on the purchase of equipment, repayment of debts or a trip on a dream vacation. What counts for the bank is that you pay your debts on time and you won’t be behind with monthly installments.
Payday loan – advantages
- it’s easy to get it,
- credit decision even in a few minutes,
- high loan amount and long repayment period,
- minimum formalities,
- possibility of online application,
- tailored to your needs and capabilities,
- relatively cheap,
- credit holidays (you can take a break in repayment, e.g. for a month or three more),
- for any purpose.
Payday loan – disadvantages
- high around-credit fees (carefully examine the contract and pay attention to commission, interest rate, costs associated with taking a loan and purchasing additional products, e.g. insurance or ROR),
- not paying installments on time will expose you to additional costs and a poor credit history, which will make you unreliable to banks.
Credit card – when is it worth applying for?
Having a credit card is the kindest and most pleasant thing, provided that you use it in a way that was intended for you. What does it mean? The loan is for cashless transactions. If you use it to withdraw money from an ATM, it is not enough that you pay a high commission, then the amount paid will accrue interest.
A credit card can be a lifebuoy in many emergency situations, such as when your favorite equipment or car breaks down or unexpected expenses or a desire to satisfy your whims arise. This product will definitely be helpful during ongoing sales. The more that the loan can be free ! Why? The so-called credit card interest-free period.
If you pay off your debt before its expiry (within the time limit set by the bank), you will not be charged any fees or interest. The interest-free period is usually around 56 days. The credit card is convenient to use, you pay with it like a debit card, except that you spend the bank’s money, not yours.
The amount of the credit limit, i.e. the funds that the bank leaves at your disposal, is set before signing the contract. The credit limit depends on your creditworthiness – the higher the salary you receive and the less credit obligations you have, the more limit you will receive.
The card’s interest rate is usually 10%. per year. A definite plus is the possibility of taking advantage of numerous discounts and promotions for card holders.
It’s important to remember that a credit card can also be useful if you need quick cash. If you have a credit card, you can borrow within or outside the credit card limit.
The solution is useful because you can set up a cash transfer yourself as part of the online banking system, and installment repayment is added to your monthly debt repayment on your credit card.
Good to know: Are you planning to take a payday loan? Find out what to look for!
Another useful feature of a credit card is the option of spreading payments of a specific value into installments. In the case of credit cards issued by Eicrethider, these are transactions with a minimum value of PLN 500
You pay only interest on the spread transaction, without any additional fees, so it is a good solution if you do not have the funds to repay our credit card and we have transactions on it exceeding PLN 500.
It is also worth checking the fees for issuing and using the card, because they can reach up to several hundred zlotys a year. Remember that this is a credit card, not a gift card, which you can use until you run out of funds and don’t think about the consequences.
It is very easy to fall into the vortex of shopping and lose control over the deepening debt. You have to pay back every zloty you spend, more than if you don’t fit in the interest-free period. Here I wrote about what not to do with my credit card.
Credit card – advantages
- ease of use,
- free credit provided that the debt is repaid in the interest-free period (50-60 days),
- possibility of automatic repayment,
- numerous rebate and loyalty programs,
- easy credit history building,
- obtaining quick funds for unexpected purchases.
Credit card – disadvantages
- it is easy to lose control over the funds spent,
- high interest rate on debt,
- high fees for using the card.
Do you already know which product will be right for you? If you prefer to be more careful and need a larger amount, bet on a payday loan. If you like to go crazy shopping and you are sure that you will pay the whole amount within a specified period (preferably during the interest-free period), bet on plastic!