Help Center, Products Description

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Credit Cards, Definition & costs

What is a credit card?

A credit card is a payment card with a linked loan that allows you to purchase items without the use of physical paper money (cash) in the form of a short term loan. The main features of a credit card are:

  • Credit Limit: Credit limit is typically between 2 to 3 times you net take home income, that might differ depending on the bank that issued the card and on if you have other financial products
  • Payment Network: A payment network is where your credit card can be accepted for payment. The two largest payment networks are VISA & MasterCard, with most credit cards being issued in those two networks.
  • Rewards System: Most rewards systems attached to credit cards fall into three main categories (i) cashback, (ii) shopping vouchers, and (iii) airline miles.

Are credit cards safe to use?

Credit cards account for over US$ 3 trillion in annual transactions, so they are very widely accepted and used. Credit card fraud only accounts for 1% of total transactions, as such credit card usages are relatively safe.

Credit cards have built in security measures to minimize theft:

  • Card CVV: This is the credit card security number on the back of the card that follows the credit card number.
  • One Time Password “OTP”: Most online credit card transactions now require an OTP whereby when you are performing the transaction the website asks you for a password which is sent by the bank to your mobile for use with that particular transaction.
  • Chip: Most new credit cards include a chip that requires a pin to process a payment.
  • Bank: Banks also do a lot of the risk management on their end by monitoring transactions as well as ensuring the full information of user matches the cardholder (i.e. asking for address and mobile numbers when purchasing online)

The most important factor in the safety of using credit cards is how you use them. There are basic safety rules to follow:

  • Do not share your credit card number with anyone
  • Do not share your PIN number with anyone
  • Do not use your credit card online on any websites you are not familiar with

Do I get charged interest immediately after I purchase something?

The short answer is no, you are not charged interest from the day you make a transaction. Most banks allow for an interest free grace period of between 55 – 58 days. But that period is not from the date you make a purchase, it is from your last billing date (most banks billing date is the 1st of every month).

What are the typical documents needed?

The documents needed for a Credit Card differ based on your employment type and on the bank extending the loan. The following are the typical documents requested:

  • General (for all):
    • Valid National Identification (National ID or Passport)
    • Proof of Address (Rental contract or utility bill)
  • If an Employee:
    • HR Letter specifying (i) Net income, (ii) hiring date, and (iii) position
    • Bank statements for the last 3 to 12 months proving income level (depending on the bank extending the loan)
  • If a Professional:
    • Bank statements for the last 3 to 12 months proving income level (depending on the bank extending the loan)
    • Valid Syndicate Card
    • Practice Certificate (if applicable)
    • Tax card
  • If Self Employed:
    • Bank statements for the last 3 to 12 months proving income level (depending on the bank extending the loan)
    • Commercial register
    • Tax card

How much does a credit card cost?

There are three main variables to take into account when looking at the cost of a credit card:

  1. Interest Rate: (For more information about interest rates please refer to the Interest rate Section of the Help Center (https://www.faydety.com/en/save/cards) The interest rate is one of the cost factors when applying for a credit card but this will mainly depend on how you use your credit card. If you are regular in paying off your credit card balance then interest rate is not an issue, yet if you keep a regular outstanding balance than the interest can add up. Please remember that credit cards quote interest rates as monthly and not annual numbers, so they may seem cheaper than most loans but are actually significantly more expensive.
  2. Issuance Fees: are the fees a bank charges you to issue you a credit card in the first place and can vary not only between banks but between different credit cards within the same bank.
  3. Renewal Fees: are the fees banks charge you to renew your credit after it expires.

How do I apply for a credit card?

Currently you apply for a credit card by either calling the call center of your bank or visiting a branch, a loan officer will take you through the process. 

 

APPLY ONLINE: Now you enable you to apply Online to credit cards with Faydety from the comfort of your own home, office, or even coffee shop. Visit our credit card page ( https://www.faydety.com/en/save/cards) to apply now for free.

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