How does a credit card work?

One Credit card is basically an identity card through which you as the cardholder can access certain Vendors of goods or services can purchase services without you having to pay for them immediately have to. The credit card works in a three-party system. There is you, the credit card holder, the credit card company that gives you the credit card And the contracting company that uses your credit card as a means of payment for your purchase accepted. All partners have specific contractual relationships with one another.

This is how the plastic money works

• As a customer of the credit card company, you pay an annual fee for its services, which can vary greatly depending on the provider and the range of services.
• Credit cards are issued on the basis of an agreement between the card company and the contractor associated with it Contractor used, after which this upon presentation of the credit card gives you a product or service sold.
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• The contracting company is ready to do so because the credit card company guarantees payment for the service provided. It charges a fee for this, which is two to about six percent of the purchase price. In return, the credit card company bears the risk that you will actually pay the amount it disbursed for you.
• The issuing of a credit card therefore requires a credit check on your person.


How do I pay by credit card?

Above all, those who are often abroad or do purchases on the Internet need ...

• It requires a current account to be set up, through which the credit card company regularly debits your sales by means of a direct debit authorization.
• The credit card can only be used up to a certain limit.
• Since you do not have to pay the invoice immediately, you will receive a deferred payment until you are settled. As a rule, your card transactions are billed at the end of the month. You are obliged to ensure that you have sufficient funds in your current account so that payment by credit card works.
• Alternatively, you can also agree that you pay off the sales made on your credit card in installments.
• If you are unable to get on your account To provide cover, the credit card company will grant you an overdraft on your credit card account. However, you pay a considerable amount for this interest chargeswhich are usually higher than what you would have to pay for an overdraft facility on your checking account.

Security with a credit card as a prepaid card

You can also use a prepaid card only.

• This is usually also called a credit card, but does not grant an overdraft and only allows you to use it within the limits of your credit balance. This credit is either saved on this card or can be debited online from your current account by the contracting company when you make your purchase at the cash register.
• If the goods or services you have purchased are defective, the seller remains the sole point of contact for your complaints. Your credit card company has nothing to do with it.
• If you pay by credit card, you are effectively foregoing the option of postponing payment in the event of defects in the purchased item and of using it as a means of exerting pressure on the seller.

If you lose the card, you must have the card blocked immediately by calling the emergency number 116116. In the event of misuse by a third party, you are then not liable for the transactions made with the card.