How a Ukrainian can choose a credit card - four tips from a banker

Many people save money for a vacation for months, but their savings are not always enough, so credit cards often become an important help or a safety net for the trip just in case.

To ensure that a credit card fully fulfills its function and does not provoke serious overpayments, it is important for a person to choose the right credit program. You cannot sign a contract without reading the nuances and studying the rates, all the preferential offers with bonuses. The size of the credit limit is not the only thing you need to know when signing an agreement with a bank.

I tried to compile an optimal checklist for those who are currently choosing a credit card. What to look for when choosing a program - four tips from a banker.

First: interest rate + commissions (tariffs), which need to be studied in combination. Not only by calculating further payments on the loan calculator on the bank's website, but also by going deeper.

It may seem that the cost of a card loan is higher than a cash consumer loan to buy a voucher/subscription to a sports club or any product. But it's important to remember that with a consumer loan from a financial company, you pay the entire amount (the interest rate is charged on the entire amount), while with a credit card, you will only pay for the amount you actually spend. In addition, you will not start paying immediately, but with a delay - most banks initially provide a grace period.

It is important to pay attention to standard credit card rates. Cash withdrawals from ATMs and money transfers/payments will be more expensive than with a debit card. In general, cashback is not the best story for a credit card. It is much more profitable to pay for goods and services. If you choose the right program, you can get the discounts/benefits or cashback you need. For example, if you need funds for sports goods or clubs, you should choose the appropriate program for this and get additional bonuses.

You should also pay attention to current payments - for cell phones, the Internet, utilities, and insurance. Many banks do not charge fees for them when making payments in mobile applications, but there are those that will charge 1-1.5% of the amount. You should not overpay.

Second, there is a grace period and other bonuses. A grace period is the time during which the bank does not charge interest rates and fees. The period of free use. If you regularly invest in it, you can use the money for free, receiving only bonuses and cashback. Most often, the grace period is now 2 months, but there are offers of up to 120 days. Therefore, you should carefully study the programs and choose the best offer. As well as bonuses that may be awarded by the bank when paying for various goods/services from its partner companies.

Third: cashback or discounts. At first glance, it seems that the amount of cashback or discount is small. Many people are already accustomed to the standard 1-2% of the cost of goods/services, and it will not surprise anyone. But we should not forget about affiliate cashback from different companies, as it can reach 20%. And for the product or service you need. Therefore, it is a good idea to make all the necessary inquiries at once and do not forget to select the desired category in the cashback section at the beginning of each month. Banks are constantly working on expanding their affiliate programs, so there will only be more cashback or discounts.

Fourth: a good credit history and errors in documents. It is always worth checking your credit history, which is collected by Ukrainian credit bureaus that inform banks (usually, checking your own history is free). It is not enough to pay off all loans, you should also make sure that the data has been updated in the Credit History Bureau and that your file contains all the information about payments. Sometimes financial institutions submit this information late and people have to insist on submitting all the data. A good history greatly increases the chances of opening a credit limit.

It is also very important to make sure that there are no mistakes in the documents: the passport should not be overdue by age, or maybe it should be reissued if you got married and took your husband's surname. All these are small nuances, but financiers are strictly monitoring such issues and may suspect fraudulent actions in the case of a simple oversight. Therefore, it is best to double-check everything before going to the bank so you do not get disappointed later.