8.5 centimeters wide, 5.4 centimeters high – a small piece of plastic has partially replaced the cash. Especially abroad, it is convenient to shop without foreign currencies and exchange rate considerations. However, the right credit card should be carefully selected, as there are hundreds of variants. The differences lie in the details: fees, billing mode, additional services. An overview:
What do the cards offer?
The basic functions are the same for all credit cards: owners can use the card to pay in shops, hotels, restaurants and other service providers worldwide. However, not every company accepts every card. This is especially true for small companies, because merchants have to pay a commission (about 2-4 percent) to the card companies.
There is no entitlement to card payment. Credit cards are also popular in online trading. You can also use the cards to withdraw cash at many ATMs worldwide. In addition to these basic functions, many cards offer various additional services such as insurance, bonus programs and discounts.
Which providers are there?
Two providers dominate: market leaders Visa and Mastercard (formerly Eurocard). Both sell their cards primarily through banks and large companies. They act as issuers, i.e. they issue the cards, determine the design and determine the fees. The payment transactions are handled by the credit card companies. The number three on the market, American Express (Amex), works directly with end customers. Visit the following link to know more about the best credit cards in USA
How is it billed?
There are major differences in billing: with a charge card, the customer receives a monthly bill. The amount spent is due immediately or within a specified period. With a credit or revolving card, the monthly statement can be stuttered in instalments.
A debit card is linked to a current account and the card payments are debited immediately. This is similar to the Girocard, which banks and savings banks issue to current accounts and which was previously known as an ecard.
And the prepaid cards?
A special form is the prepaid credit card. The way it works is known from mobile phones: A credit is loaded onto the prepaid card and can then be used. Expenditure is therefore limited. Prepaid credit cards also use this principle. The owner can only spend as much money as was previously booked on the card.
The cards are popular with parents whose children travel abroad for long periods of time, for example to exchange students or study. And also for people who are no longer creditworthy. However, not all companies accept prepaid cards as full credit cards. Many car rental companies reject them as security.
The consumer organisation warns against dubious providers who offer such cards for excessive fees or with the promise to grant credit. If you want to buy a prepaid card, you should check the conditions carefully beforehand.
What does a card cost?
The costs for a credit card are very different. Some issuers advertise with a free card, many take an annual fee in different amounts or hide the costs in the fee for a checking account. In addition, there are costs for use: if you don't pay in euros, you usually have to pay a foreign currency fee.
Some retailers abroad charge an additional fee. Most withdrawals from ATMs are also not free of charge. The card issuer determines the amount of the fee. A payment transaction abroad can cost up to five percent of the invoice amount – or be free with other cards. There is also interest if the deposited account does not have sufficient credit balance.
How do I find the right card?
The most convenient, but not always inexpensive way is to apply for a credit card at your bank. However, the cards are also available without a current account. The cheapest card is mainly determined by how you use it.
Anyone who frequently pays abroad in foreign currencies can choose a different card than consumers who only travel in the euro zone. If you buy regularly from the same provider, you may be able to benefit from bonus programmes. There are various websites on the Internet that compare the conditions of credit cards.
Can strangers misuse the card?
Misuse cannot be completely ruled out. Criminals repeatedly succeed in stealing credit card data. In many cases, so-called phishing is used: Data thieves falsify an e-mail or website and ask the cardholder to enter his credit card details. To pay on the Internet, it is sufficient to know the card number and the CVC check digit on the back. The card can therefore easily be misused there.
However, the cardholder's liability is legally limited to 150 euros if he has not acted negligently. For example, it would be negligent to store the card together with the PIN. Many providers do not involve the customer.
How can I prevent it?
Card data should only be used on the Internet and personally in reputable shops. Owners should not give their credit card away and should not write down the PIN, but learn it by heart. On the statement, check carefully whether all payments have been initiated by yourself and have not been debited twice.