What is a Credit Card and Its Benefits?

Oct 21, 2018 by Ohood Awayes

It is hard for us, people of the 21st century, to deny the fact that credit cards have become an indispensable part of our lives. Despite the fact that almost every one of us has a credit card, it seems that people only know that they can use them instead of debit cards and that they have to pay off before a fixed date. However, there are many benefits to using a credit card that you might not be mindful of. If you don’t know the difference between a debit and a credit card, read this article and then revisit this page to dig deeper into credit cards.

MasterCard and Visa, what are they?  

Take a look at your cards, whether debit or credit, and you will find to the bottom right an icon that reads either ‘MasterCard’ or ‘VISA’.   MasterCard and Visa are credit card brands. They don’t issue the physical cards that we use. They only provide the payment service and mechanism to those banks, who in return issue the card. It is also not up to them to determine what benefits come with the card. This is determined by the bank.

By and large, MasterCard and Visa are the most well-known Credit Card brands and they are accepted as payment methods worldwide. We as holders of credit cards don’t have anything to do with either brand. All that should matter to us is the benefits that we can get using the credit card.

Benefits of using a credit card:

1. Protection: In any case of fraud, you are by law guaranteed to have your money back. Your only role here is to report any scam that might occur immediately to your bank.   

2. Cashback: Simply put, this means that you get money back for using your credit card to pay. The calculation method (a percentage of the spent amount or points) and how you can spend the reward differ from one bank to the other. Therefore, you should read the details carefully before purchasing the card.  

3. Air miles: You can apply the same concept of cashback, but here the rewards are related to flights. So, you accumulate ‘travel points’ by using your credit cards to pay for your purchases and you get rewarded a specific amount of money off on your flight ticket, hotel stay, access to luxurious airport lounges, etc.
     
4. Islamic Credit Cards: As the concept of credit cards is similar to loans, some banks issue Islamic Credit Cards where no interest is applicable.  

5. No salary transfer: Purchasing a credit card does not usually require a salary transfer. You can buy the card from whichever bank you wish, provided that you fulfill that bank’s criteria for credit card holders.  

The benefits vary depending on the bank that you are dealing with. Some banks provide more benefits than the others. You should also bear in mind that sometimes annual issuance fees apply on the card. Therefore, you should look at all the aspects when comparing between the banks and decide wisely.

Click here to learn about the credit card options you have available in Jordan.