Best Credit Card: What to look out for?

What is the best credit card?

Many people find it difficult to choose the best credit card. The range of offers is too large and the terms and conditions are usually hidden in the small print, especially in the case of gold credit cards, which makes it even more difficult to compare different credit cards. The easiest way to find the best credit card is to use a comparison calculator on the Internet. Here, all the necessary information is presented simply and clearly, so that you can make your decision within a short time.

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What additional services do premium credit cards offer?

In addition to a usually higher credit limit for your credit cards and the usual insurance benefits for gold cards, some credit card companies offer special services for their best customers. For example, some premium credit card holders have a concierge service to their place or are granted access to airport lounges.

However, if you are “only” a gold card holder, you will also enjoy some additional benefits such as insurance and cash services. It should be noted that in order to claim insurance services such as cancellation insurance, you must also pay for the trip with it.

When do I have to pay for the settlement of the card?

Here, too, there are significant differences due to the different variants of credit cards. With the classic credit card in Germany is usually charged once a month. However, there is also the possibility to pay your credit card in installments. In this case, it behaves like a classic installment loan and your account is debited monthly with a constant installment. Here, however, interest accrues on the credit amount. Purchases made via debit cards appear immediately in your account and are posted within a few days. With prepaid credit cards, you pay your statement by charging it in advance, before the actual purchase or disposition.

Is a credit card the same as a debit card?

There are two main differences between a credit card and a bank card. First, the bank card is usually issued with any checking account, whereas a credit card in many cases must first be applied for at the bank and can only be issued after a credit check. The two cards also differ when it comes to the time of posting. Payments and withdrawals made with a bank card are usually seen in the account within 2-3 days. Depending on the type of credit card, payments made with it can also be charged either within a few days or, if you have a “real” credit card, your payments are collected on the card and charged from your account once a month.

How do credit card bonus programs work?

Many credit cards offer you bonus programs, for example in the form of cashback - promotions. In a cashback promotion, you get a certain portion of your purchase back after a period of time. An example: You buy a bed online for 1500€. Your credit card provider has a cashback promotion where you get 10% refunded. In our example this is 150€. So you effectively pay only 1.350€ for your new bed. However, such actions are also to be enjoyed with caution, because they often tempt to excessive consumption.

How does the credit card affect my Schufa?

The effect of a credit card on the SCHUFA depends very much on the type of card. Prepaid credit cards or virtual credit cards usually have no effect on your SCHUFA. In the case of credit cards that are linked to an account, for example at a direct bank, the account is noted in the SCHUFA. However, credit cards with a credit line are usually also reported to SCHUFA.

Can I pay the bill in installments?

With some providers there is the possibility to pay your credit card in installments. Here you should just make sure that you do not get involved in too high interest rates. The risk of getting into debt with an installment credit card is also high, as it is easy to lose track of your current account balance.

What are the advantages of using a credit card while traveling?

Using a credit card while traveling comes with numerous benefits. Some credit card providers give their Customers the opportunity to withdraw money free of charge abroad or at least to pay free of charge in the EURO area. Credit cards are also accepted internationally more than EC cards. There is no difference between MasterCard and VISA in the acceptance abroad nowadays.

If you are the owner of a gold credit card, you can also benefit from the numerous insurance services that are often offered. Especially if you travel a lot, a gold credit card is worth it just for the insurance offered (e.g. travel health insurance or rental car liability). Often, services such as a cash service are also included.

Is a second card worthwhile?

Second cards are often useful if you share an account as a married couple, or your partner often has the money from your account. According to the terms and conditions of most banks, it is also prohibited to use a card issued in the name of another person. In addition, second cards of credit cards with credit lines are often much cheaper than the actual credit card. However, with free credit cards, a secondary card may incur additional charges.

How does contactless payment with a credit card work?

For some years now, most credit card providers have also been offering contactless payment via NFC. All you have to do is hold your credit card up to the card terminal to initiate the payment. Up to an amount of €25, confirmation by PIN is not required.

Contactless payment by PIN is classified as secure because a payment can only be triggered from a distance of a few centimeters. In addition, you can only make contactless payments for a certain amount per day before your PIN is requested for each transaction.

How much will a credit card cost me?

The cost of your credit card depends entirely on what features it has. Credit cards with high spending limits, as well as golden credit cards are usually more expensive than normal credit cards or even prepaid credit cards. The cheapest credit cards are in combination with an account, which are issued as a debit card. Often, no extra fees are charged for these. However, you should note that it is not a “real” credit card, because your withdrawals are immediately debited from your account.

How do I pay with a credit card?

Paying by credit card works the same way as if you would pay with your EC card. That is, by placing or inserting your card and, if necessary, confirming your PIN. In rare cases you can also pay by signature. In the past, a major flaw of credit cards was always the acceptance of them. Now, however, credit cards are accepted almost everywhere. Online you can pay by entering your credit card number, as well as expiration date and verification number. Occasionally, you then have to confirm the transaction via 3D-Secure (MasterCard SecureCode, Verified by VISA). When staying at a hotel, it is more common that your credit card is deposited at the reception and all transactions are booked there.

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What is the credit card limit?

Credit card limit is the maximum amount of monthly withdrawals you can make with your card. For debit and prepaid credit cards, this limit changes dynamically with your current net worth. If you have a lot of money loaded on the prepaid card or your account is well funded, you can spend a lot. Likewise the other way around. If you have a credit card with a credit limit, this depends largely on your creditworthiness. If you have a rather bad credit rating, this limit can be 500€, if you have a very good one, it can be several thousand. It should also be noted that, as a rule, gold credit cards come with a higher credit limit.