Credit Cards Compared: How to Calculate Costs and Benefits

The payment card market is constantly expanding and choosing the most convenient credit card is a difficult operation.

There are several cost items that affect the convenience of the product and therefore it is necessary to keep in mind to understand the differences between the different credit cards.

Credit Cards Compared

In evaluating the convenience of a credit card, we often stop on the most well-known cost items: the annual fee and the issue fee, without considering some commissions, such as for example the cash advance or for refueling, which in the recurrent use of the card could significantly affect the annual cost.

Mandatory Credit Card Features

Reading reviews, you happen to come across the definition of rechargeable or prepaid credit cards with Iban.

Often this terminology has been used to indicate the possibility of using a pure or Iban prepaid card to shop online.

With the arrival of advanced ATMs enabled for online purchases, this definition can generate confusion: a credit card is such only when it makes available to the user a credit line, which allows postponing payments for a period of time which can vary from one week to 40 days.

The rechargeable prepaid cards, with or without Iban, do not have all these conditions: they do not connect to current accounts even if they are equipped with internet banking and above all allow you to spend only the sums that have been recharged.

The Revolving Card

Revolving cards are special credit cards, which allow you to pay the expenses in installments of the bank statements: in practice, the amount of a purchase paid with the revolving is not charged all at once, but in monthly installments on the current account of the owner.

In the comparison of revolving credit cards, the items to be considered are more numerous, there are many more indirect costs, compared to a normal credit card, which is mainly linked to the interest rates applied in the installments.

To simplify the choice, one must first start from an assumption: to make a comparison between revolving credit cards that use the application of interest rates in installments, with “fixed” amounts rather than as a percentage.

So when you decide to compare the various revolving cards, you only have to compare those that apply interest rates proportionally to the expense. With this system, by paying small amounts or larger amounts in installments, there is no aggravation of the conditions, therefore it is possible to spend more serenely and free from limitations dictated by “convenience”.

The first item to consider for choosing a revolving is to manage your account, Paying Bill using MyCCPay and after the annual running costs.

Credit Card Balance

Choosing a credit card on balance only poses the question of direct costs, but other than the annual operating cost it is necessary to consider these items as well:

  • Costs related to commissions in case of use
  • Cost of issuing the main and additional cards
  • Communications costs
  • The application of stamp duty
  • The annual fee.

Method of Use and Frequency

If the card is often used for travel, the fees charged for use in currencies other than the euro should be mainly assessed.

If the credit card is used for practically every expense, it can be useful to choose those that are part of particular circuits and that add up the advantages of loyalty cards, for example, to the reduction of the cost of the annual fee.

If you want to request a credit card for occasional use or even just for emergencies you should aim for cards with low or no fees.