However, in Pakistan, the concept of credit card is still in its early stages. People are accepting the concept and the facilities offered by the product and are thus getting themselves credit cards that suit their budgets and needs. From a job holder to a freelancer in Pakistan, all are now looking forward to having a credit card to help them in their hard financial times. However, the Pakistani community is still with limited knowledge on using a credit card. This is the reason why we have compiled a set of most needed information that is required to be kept handy, if you are a  first time credit card user, you will need to keep these points in your mind to ensure a secure use of the facility offered and not to fall in the black hole of debts.

Being a credit card user, below are the points that you may wish to have known in the first place, to use the credit card in a better way.

Understanding How a Credit Card Works:

First comes the understating about how this financial product works. In simple words, when you buy something with your credit card, you actually pay for it later. It is unlikely a debit card that immediately deducts money from your bank account. While buying with a credit card you actually owe to the bank rather than owing the store. The banks are the one that offers loans to the users for immediate use of the facility to pay them off later.

Thus the credit card will work for you in case you need to change your car tires now, but you are out of cash. With the help of a credit card, you can get things done when you need and pay for them later when you will have money in your pocket/account.

However, it is dangerous if you start buying more than what you can actually pay off.  Because no credit card will offer you the loan for more than one month which means that you will have to pay off the amount that you have lent from bank on monthly basis. If you are unable to do so, you will have to pay an additional amount in terms of interest or fee, apart from the actual amount that you have lent from bank.

Why You Must Have a Credit Card?

If you are good enough to stick to your budget and are able to secure a considerable amount in the name of savings, you may not need a credit card at all.

However, one good reason for having a credit card is that you need to build up a strong credit of financial profile. Although the credit score is not the only contributing factor to your financial profile, it does count much.

If you are looking forward to taking some bigger benefits or help from any financial service providing company in coming future, having a credit card with wisely used services can be of great help. You can use the credit card to make payments and then pay them off responsibly, and things will work magic for you. A good score will have an impact on the chances of getting a loan for your home or apply and get an auto loan successfully.

On the other hand credit card also offers a better level of security as compared to cash or debit card. For instance, if you lose your wallet, you can cancel the credit card easily and can dispute any charges that you didn’t make. But if you lost your cash, it is probably gone forever.

Expert Tips on Using Credit Card:

Here are some of the expert suggested tips to keep in mind while you are opting to use your first credit card wisely.

• The credit card issuing bank is lending you money for a specific time period and after that, you will have pay additional amount as an interest on the actual amount to be paid.
• Never tend to have more than one credit card at one time.  
• Based on how you are intended to use, try to keep the credit card limit as low as possible.
• When buy anything using your credit card, make sure to pay off the balance within a month. It will keep you safe from paying service charges and will also help you build a good credit record.
• Prefer to use a credit card only for emergencies focus on using a debit card, cheques and cash for making most of your payments.
• Never ever give your credit card to anyone else. Because the end, it is you who is responsible to pay off all the charges.
• Keep a proper track of where you used your credit card and how much amount you paid using it.
• Even if you are using the card for emergencies, make sure that it is in an active condition. You can do that by making small purchases in every 2 to 3 months. However, make sure you are paying off the balance before the due date
• Do not let your credit card spending cross 20% of your net income per month. Create a budget and stick to the plan.
• If you think or find that you are not able to handle your credit card wisely, it is better to get rid of it.

Using a credit card is a skill anyone can have, However, self-control is the key to use from a credit card. If you are able to keep a control on your spendings, you can use the credit card and can earn benefits.

Khurram Zahid

The post A Quick Guide for First Time Credit Card Users in Pakistan appeared first on Smartchoice.pk.

Also read: 5 Top Banks Offering Credit Cards in Pakistan

Visa Credit Card

Visa Cards are credit or debit cards provided by Visa Inc. Their popularity keeps growing day by day and it’s being used across about 200 countries. More than 2 billion ATMs across the globe are helping individuals and businesses transfer money. More than 2.5 billion Visa Cards have been issued by Visa Inc. till this day.

There are two tiers of services in Visa Card. At base level, Visa card offers benefits such as coverage of damage, and warrantees on the purchases done via these cards. Next level is the Visa signature, which offers some extra benefits in addition to the ones offered at the base level.

If you are into sports, you might want to go for Visa Signature, since it allows its cardholders access to sports facilities, such as golf clubs etc. And that’s not all; it’s easier to access the best hotels all across the countries where Visa Card is accepted when you have Visa signature. Visa Cards are commonly used in Pakistan as well – most banks issue those, as the use of ATMs has grown hugely over the last few years.

With Visa Signature, you can earn reward points and later used them during your travel for various benefits.

Visa Card also covers rental collision damage. If you’ve used your Visa Card to pay for the vehicle rent, the damage will be covered in case of collision or theft. A primary coverage of physical damage or theft is provided at international level – so you can be at peace while traveling if you have done the payments through your Visa Card. This only applies to the rental vehicles and not your personal belongings – to take care of your stuff while enjoying your trip.

If you ever lose your Visa Card, you can use Visa Card’s Zero Loss liability benefit, as you’ll be covered in case of any fraudulent transactions made through your credit card.

Also read: How to Enjoy your Credit Card without Going into Debt

MasterCard

A MasterCard is a credit or debit card provided by MasterCard network. It’s just another credit card with a different brand name – but it definitely has its own unique benefits. There are three tiers of benefits offered by MasterCard; base, World, and World Level Elite.

Price Protection in MasterCard

One unique benefit MasterCard provides at its base level is ‘price protection’, which isn’t something we can gain with Visa Card. For every purchase made with MasterCard, if the price of the item is reduced within 60 days, the cardholder can claim back the difference. Most banks in Pakistan provide MasterCard, so you’ll simply need to visit your bank to start enjoying the perks of MasterCard. Some banks provide internet fraud protection with MasterCard to help you secure your transactions.

In MasterCard World level, the benefits include extended price protection (120 days), access to lots of hotel luxuries, and personal travel advisor.

Also read:  6 Common Type of Credit Card Frauds and How to Avoid Them

Travelling with Visa and MasterCard – A comparison

If you love to travel, credit cards can be your best friends. Both Visa and MasterCard have their own attractive features when it comes to traveling. As mentioned earlier, Visa Signature provides you access to hotel benefits across the world, such as automatic upgrades and VIP treatment. Shopping at airports across is also more convenient with Visa signature as it helps you gain many privileges. If you go do with some extra support, Visa Signature Concierge is there for you with many amazing services from ticket-booking to ideas related to fashion and buying gifts.

Another very important benefit of Visa Signature during travel is its travel accident insurance service. If you pay your travel expenses through a Visa Card, your travel insurance will be covered.

MasterCard also has great travel benefits for its cardholders. We’ve already talked about some features of MasterCard World level, which include VIP access to luxury hotels. And what’s more, if you are paying your travel charges with a MasterCard World or MasterCard World Elite level, you get the best out of your trip by having access to VIP events, promotions, and special offers.

MasterCard also has a Concierge service like Visa Card. In World Elite, you’ll get a personal assistant to ease your many travel-related headaches, such as finding the perfect hotel room, or booking a decent table. If you’re visiting a totally new place and aren’t sure where to stay or where to buy the perfect gifts for your loved ones, the services of the personal assistant provided by MasterCard can save you a lot of trouble and frustration. It’s like having your own personal genie on your fingertips.

MasterCard World Elite’s perks also include reduced airfare and other money-saving benefits, like reduced prices on cruises, and discounts of car rental services. You also get many superb vacation packages as World Elite benefits, so if you’re passionate about travelling, World Elite might be just the thing you’re looking for to help you enjoy every moment of your trip.

Theft Protection with MasterCard

MasterCard provides its cardholders with protection against identity theft. The service is simple; call on the provided number and let the personal assistant know of your security concern. The assistant will further guide you on the further steps that need to be taken.

So, which one’s the best?

There is no ultimate right choice when it comes to choosing between Visa and MasterCard. Both have their own perks, and the right choice might vary from consumer to consumer. Go through all of the benefits offered by both networks and see which one fits your needs. Visiting your bank and talking to a professional might be the first right step you’ll take in this regard.

Khurram Zahid

The post Visa Or Master? Which Credit Card you Should Go for? appeared first on Smartchoice.pk.