Currently, credit cards are more appealing to Spaniards, and this is because they do not need to have cash or money in their accounts to make purchases.
This means of payment has made it easier for people to make purchases and pay them later, through several installments.
The convenience of payment allows people to have things that they otherwise could not.
In addition, this method of payment has become one of the safest, especially when you make purchases through the Internet.
Still, do not have a credit card? … You can request a credit card from our comparator.
The number of cards that circulate right now in Spain amount to more than 48.7 million, and if you make part of that amount, it is important that you know the payment methods that credit cards normally have.
And if you still do not have one it is important that you also know the different types of credit cards that exist in Spain, so that you can get an idea of which one is the best for you.
I will explain each of the forms of payment along with the advantages and disadvantages.
In addition, I will give you 6 smart reasons to pay your card bill, because when used correctly, credit cards can be a tool to build a strong financial future.
Ways to pay the credit card
When we request a plastic in our bank or in an online issuer, the first thing we have to decide is what will be the payment method.
And this is necessary since there are several different ways to return the money that you have borrowed through your card.
Next, I will describe two methods to pay your credit card, I will tell you how it works, analyzing its advantages and disadvantages of each of the respective methods.
This information will be useful when it comes to paying yours wisely.
Let’s start with the first and best known among all users of this deferred payment method.
Method 1: Total payment or a single payment
The total balance of your account statement is the amount of the charges made during the billing cycle, plus any outstanding balance in the account.
This form of payment allows you to pay the total amount of purchases you have made during the month with the card, without having to pay commissions for the money borrowed.
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To do this you must take advantage of the grace period that is the time from the end of your billing cycle to the expiration date of that cycle, so it is important that you know very well what your grace period is, in order to take advantage of it.
Regularly paying the balance of your card statement requires a smart budget, especially if you have set your payment preferences by credit card to automatically pay the balance of the account status.
You must make sure that you have money in your bank account to cover all the charges of the previous billing cycle, otherwise, your account will be in red numbers or you will have to pay interest on the charges that have been made on the card.
But as I said, if you have a good budget and good planning you can save the interest on the purchases you make with the card.
Many people use this payment method since this is the only way to save interest.
Advantages of paying your credit card with the single payment
- By paying your entire balance, you save yourself having to pay interest.
- In this way, you will eliminate the risk of over debt
- It is a way to keep the expense of your credit card under control.
Disadvantages of paying your credit card with the single payment
- You only have the grace period that is usually 30 days, to pay your card balance.
- If you do not have control over your expenses in your budget, your balance can get out of hand and end up in the red or you’ll finally have to pay the interest on the card.
- By making your payment in this way, you will run out of cash, from which you could perhaps get more profitable, such as in an investment or deal with any unforeseen urgent money.
Method 2: Deferred payment
With this form of payment, you can pay the amount you have spent on your purchases with the credit card in a series of smaller monthly installments, including their respective interests.
Once you are paying the installments, the money is being replenished so that it can be used again.
This type of payment is widely used by people who want to make large purchases, that is, they require a large outlay of money and at that time do not have.
With the deferred payment system, people can make large purchases, such as, for example, household appliances, which can be paid for by convenient installments.
You can choose between paying a fixed amount each month or paying a fixed percentage of your total balance. Let’s see:
Payment deferred fixed fee
In this payment option, you agree with the financial institution to pay a fixed amount of money each month, for the money you have borrowed from the card.
You can decide the amount you want to pay fixed, although in most entities cannot be less than 30 euros.
Remember that the amount you set to pay depends on how soon you will end up paying, that is, if the fee is very low, it will take longer to return the money and therefore you will have to face your respective interests.
The sooner you pay your card balance, you will be free of debt.
Deferred payment with a percentage fee
This payment option you agree with the financial institution to pay a monthly fee, but only the percentage that you have spent of the card balance.
You can also decide what percentage you want to pay, but it is usually 3% or 5% or 30 euros.
Advantages of paying your credit card with deferred payment
- With this payment system, you can afford to buy things that you can not otherwise.
- Convenience when paying your purchases in small installments, without pressure to collect all the money.
- If you choose the deferred payment fixed fee, you will guarantee to pay the same amount always.
- You can benefit from discounts at establishments that have an agreement with the issuing entity.
Disadvantages of paying your credit card with deferred payment
- With this method of payment, you have to pay interest on the balance of the card account, which is generally high, according to your financial institution.
- It’s easier for you to lose control of your expenses.
- Due to the loss of control over your expenses, you may fall into over-indebtedness.
How to choose the right payment method?
As you have seen each of the modalities has its respective advantages and disadvantages.
Depending on your financial situation one or the other will be better.
For example, if you are a methodical person who sticks to your budget to the letter, perhaps your best option is method 1, that is, the single payment, since this way you will be saving interest.
However, maybe you want to make a large purchase, for example, a 70 “TV, for this type of purchase you need a good outlay of money that you may not have everything, perhaps in this situation you prefer to use method 2, that is, deferred payment.
As I said before, in each situation it is better one or the other in any case you should know what type of card is right for you.
For this, you must know the different types of credit cards that are in Spain and use it intelligently.
Below, you will see the reasons why you should pay your card bill before it expires.
6 smart reasons to pay your card bill before
Regardless of the method, you choose to pay your card balance, I will give you 6 reasons why you should pay your card before it expires.
In today’s world, it will be difficult to find a consumer who does not have at least one credit card in his wallet.
That is why it is important to have as much knowledge as possible about them, in order to act accordingly.
With the only idea of getting the most out of them.
It may seem unnecessary to pay your bill earlier than required, but there are some advantages to sending your payment earlier.
Do you want to know them? Next, I will show you:
You release your credit
If you choose method 2. Most credit cards charge you a minimum every month.
If you pay more than that simple minimum, you will have a more available balance on your credit card.
This is useful if you plan to use the credit card to make a large purchase.
It also makes sense if you plan to travel, since hotels, airlines, and car rental companies can make you hold your card that can last several days, or even up to a week.
You can improve your credit score
The easiest way to prove to the credit agencies that you are solvent is to pay your bill, and paying it early can only help you.
In addition, credit agencies base your debt on the total at the end of the statement cycle.
So, if you can pay the debt before the cycle also ends, you will benefit by getting a better credit score.
You do a better job of tracking expenses
If you are in the habit of paying the credit card charges as they come, you are likely to check your balance more frequently.
By doing this, it will allow you to be more aware of how much you are spending, and on what.
Cutting costs if they do not fit your current budget.
You will be able to maintain your financial health better.
Reduce the interest charged to you
When you carry a balance in your credit card account, you accrue interest charges every day, based on your daily balance.
So when you make a payment before the due date, you are lowering your daily balance, which can reduce your significant interest charges.
If you pay part (or all) of your bill in advance, it means that you will have a minimum daily balance and lower interest payments.
End the debt faster
If you direct the money to pay your credit card bill as soon as you can, it means that your money can not be used anywhere else.
In essence, you are preventing yourself from spending money in cash, in something that could be a waste.
You can consolidate my payday loans use the money to pay off the debt, instead of adding more.
That is, making an advance payment, you are committing your funds to pay your debt, instead of simply planning to do so in the future.
Without having those funds available for other discretionary expenses, you can not change your mind and spend the money elsewhere.
You will be less likely to forget it
When you pay bills only after the last monthly statement, errors can occur. Invoices can be lost.
You can leave the ball sideways, even lose it between the cushions of the sofa.
But if you have the habit of checking your credit card balances, and making payments frequently. It will be less likely that you have a problem.