It is not always possible to rely on yourself in everyday needs. Some people live from salary to salary, others – cannot live only on their own money and need to take out a credit card. The word “credit” causes mistrust to many people and is associated with overpayment and debts. However, in choosing the right card, you get not only a convenient payment method but also a reliable financial assistant. And, probably more importantly than anyone else, low income earners should choose the best credit card.
Low-Income Earners Should Choose the Best Credit Card
So where do you even begin to start? What are the main factors in a credit card? And what else should you consider?
The Main Indicators Influencing the Choice Card
Before you decide how to pick a credit card, you should analyze the market of banking products.
Pay attention to the following criteria:
- Effective interest rate (which includes additional fees and commissions). The average size for low income earners is about 50%. If you are offered a low percentage, ask about the presence and size of additional, not declared commissions.
- The maximum amount of the credit limit. The bank asks for more documents for a bigger loan. Its size depends on the following factors: the purity of the financial dossier; the source of income, and the official employment of the client; family status (the presence of the family is identified with responsibility, plus the total income of the family is taken into account); age (21-65 years, in exceptional cases, these boundaries are expanded), place of residence coinciding with the separation.
- Grace period when the operation of funds is at a zero or at a reduced rate. It ranges from 25 to 62 days, and it is rarely 90 days for beginners. For some organizations, this period applies to ATM cash withdrawals.
- The interest on the balance. Not many people offer this service. It is such a nice trifle. It should also be clarified whether its activation is necessary.
The fee for cash withdrawals is from 3 to 5%, often with the addition of a fixed amount. This is another source of income for banking institutions. The days of free withdrawals at any ATMs in the country are seemingly gone. And even if there is, it is either in the ATMs of the parent financial firm or with restrictions on the amount or with a monthly service fee.
Take note of bonuses, promotions, discounts, and cashback. It can be a MasterCard Rewards and bonus, Visa privileges, installment in large stores, and a maximum refund of 1-5% for different categories of goods and services.
It is important to calculate what will happen in force majeure. Moreover, if the amount of these payments is large, it is more profitable to refinance in another institution and close an unprofitable question.
The terms of lending cannot be considered, because even if they are limited to a year, there is always the possibility of extension. The term of approval of the request is automated, scoring programs respond within 15-20 minutes.
Many appreciate the convenience of this interesting banking product, the credit card. Often it is much more convenient to use it than a regular loan. Today you can comfortably get credit cards for low income and allow yourself a little purchasing power and the ease of use over cash.
The Pros and Cons of a Credit Card Without Income Certificate
Financially literate people study advantages and disadvantages before using any financial product. It allows us to understand whether it is worth using it at all.
You can highlight several disadvantages which a credit card without certificates of income has:
- a low percentage of favorable decisions. To increase the likelihood of approval, borrowers may be advised to apply to more than one credit institution;
- the rather high-interest rate is explained by the fact that the bank assumes a high risk that the loan will not be returned when issuing such cards;
- the credit card limit is often less than when the certificate is provided. However, there is a way to get a large amount – you can confirm your security by showing an employee of the bank passport with marks of departure or PTS (as a pledge it is not left).
All these drawbacks are due to the peculiarities of credit cards. But the advantages of this method of obtaining loans easily cover such disadvantages.
Advantages of a credit card without income certificate
First of all, those who decide to take a credit card, get a unique opportunity to use it indefinitely. That is, in contrast to the usual loan after even incomplete debt repayment, you can re-borrow money within the limit provided to the client.
There is another way to save money: large credit institutions issue credit cards with a grace period. That is, if you repay the debt within the number of days after the withdrawal, the interest will not be counted.
These best credit cards for low-income earners have other advantages, which are characteristic only for it. First, it is a high speed of registration. It is explained quite simply: you do not need to collect any documents and wait for the employer to prepare them. You can take your passport and immediately go to the bank.
Modern technologies are in progress. Today it is not necessary to go to the office and wait in queues. It is much simpler to submit an online application form on the web. This was made possible due to the lack of need to provide an income statement.
On the websites of banks, you can find any information regarding the issuance and maintenance of credit cards. The problem is that it is very difficult for a non-specialist to choose the best among them. We either have to deal with it on their own, spending a lot of time, or seek help from specialists, which entails additional payments. In other words, there is simply no clear and accessible comparative information on this issue.
Each client, choosing the most favorable credit card with low income, focuses on their own needs. If the borrower does not have enough money to make it through the month, he will often use a credit card. Experts advise choosing cards with the longest grace period. At the moment, the maximum grace period is two hundred days.
If you decide to stop using the credit card, do not forget to close it. Otherwise, it will begin to accumulate debt for service, and this can adversely affect your credit history. Often banks close credit cards with a lower amount than they’re willing than they give out. When applying for the closure of the card, you can offer more favorable conditions and other bonuses. Think about how much you really need them before you agree.
Low Income Earners Choosing the Best Card: Conclusion
If you’re one of the low income earners out there trying to find a credit card that’s right for you, be sure to consider the following:
- What does this mean for you in the short term? Could you quickly gather up the money from somewhere else to fulfill your needs?
- What does it mean for you in the long term? Is this move going to set you back for months or even years?
- Are you looking to build your credit? Do you have the discipline to spend within your means?
A credit score is nice to have and it certainly makes life easier, but if a credit card is going to get you into trouble financially, then it’s best to do without one.
Are you one of the low income earners looking for the best card? What have you found?
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.