What is a credit card?
A credit card is an electronic means of payment made available to consumers by banks and other financial entities, allowing them to purchase goods and services or receive cash advances.
Credit card issuers establish a monthly limit of credit based on the card holder’s income and other variables. This limit sets the maximum amount of money available in credit each month in the card. There are several types of credit cards, such as cashback cards, rebates, premium credit cards or cards that offer discounts, loyalty points and air miles.
What types of credit cards are there?
Most credit cards include some rewards in order to attract their holders. A rebates credit card allows you to save on purchases by benefiting from direct discounts in the various partners of the issuing entity.
With an airline miles card you can earn and accumulate miles as you make purchases with your card and then exchange them for flight tickets and other advantages, for example access to airport lounges.
In turn, a cashback card gives you cash back each time payments are made using it. The cashback rate concerns the percentage of money that you receive back from the amount that you spent and it usually ranges from 1% to 3%.
Premium credit cards, on the other hand, are prestigious products which offer the largest number of insurance coverages as well as the most comprehensive ones. They often give access to lounges and other type of perks that you can expect from a VIP card.
It is essential to take into account the variety of credit card types that there are when choosing your own in order to ensure that you take full advantage of its potential.
What should you consider when choosing a credit card?
The best credit card offer for you depends on how you intend to use the card. However, when applying for a credit card, consumers should pay attention to the following aspects:
- Interest rate: the "price" of borrowing money on a credit card. Each issuing entity has a different APR (Annual Percentage Rate) that will be charged if the customer does not pay the balance in full by the due date.
- Annuity: is the annual cost inherent to the possession of the card. There is currently a variety of cards with no associated annuity costs or that offer the first annuity.
- Credit limit: The maximum amount of credit, pre-established by the provider, that you can use to make payments on your purchases.
- Rewards: you must pick a credit card that, given your consumer profile and needs, allows you to enjoy all of its advantages, such as cashback, discounts, airline miles or loyalty points.
- Insurance: Several cards include insurance packages, from travel insurance to purchasing protection insurance.
What are the requirements to apply for a credit card in Portugal?
Most financial institutions in Portugal require that you be 18 years old or over and a resident in Portugal for at least five years. Having a stable job and meeting the minimum salary requirements, which vary depending on the type of credit card you are applying for, will also work in your favor.
When formalizing the request, the consumer should ensure to have a clean credit history in order to facilitate the approval by the issuing authority. In fact, your credit report or credit score is a major factor in determining if you will be accepted for a credit card. Lenders will use it to judge how likely they think you will be able to repay debt on a card.
How long does it take for my application to be approved?
The processing time may vary depending on the card issuer. Once approved it will take about 7 to 10 business days for you to receive the card. Do not forget to certify that all the necessary documentation has been sent to the lender in order to facilitate and accelerate the process.
Nevertheless, some institutions allow an online immediate pre-approval of the credit card, which hastens the process.
Cash advance on credit cards: what is it?
Cash advance is a credit card feature that allows you to have an available amount of money in your current account in case of any unexpected situation. Therefore, the limit amount available on the credit card is transferred to the consumer’s account.
How does it work and what precautions should be taken with cash advance?
In emergency situations, where you may need some extra money, cash advance can be very useful. In order to access the money, you can use an ATM and withdraw it from there.
You can also carry out this operation by calling the bank or through homebanking. In these cases, however, the amount requested will only be made available in your account on the following business day.
Before resorting to cash advance, one should pay attention to the fees charged by the lender. The vast majority of banks charge a commission for the money made available through this feature, which includes a fixed amount per transaction and a percentage for the amount that became available.
When using cash advance, if you choose to repay only part of the amount used, it may also imply the payment of interest rates. A complete list of fees existent and their costs can be found in every banks’ websites.
Which credit card fees are there?
In addition to the cash advance costs, the consumer should look out for all the different credit card fees that the card holder may be charged. Although it varies from card to card, before using this product make sure you know all of them:
- Gas fee, which is applicable to transactions carried out in gas stations;
- International processing fee, which covers transactions carried out outside the European Economic Area (EEA) or transactions within the EEA with currencies other than the Euro;
- Foreign Currency Conversion fee, which falls on transactions paid with currencies other than the Euro.
Some cards may also charge a monthly fee whenever a certain amount of the credit, which was previously agreed with the bank, is not being used. Hence why it is so important to analyse all the terms of the credit card contract before applying.
Is there a free credit card?
Several institutions provide credit cards with no annual fee nor issuing costs, which are usually referred to as free credit cards.
While these products generally have a higher APR compared to cards that charge annual fees, hiring a credit card without these may be a good choice since many of these cards even include free insurance, discounts, loyalty points, air miles and also gas fee exemption.
With our credit cards simulator you can access, quickly and easily – and gratuitously – to all credit cards with no annual fee in Portugal. When choosing a credit card without annual fees, the consumer must take into account, besides the APR, any additional costs that may be directly or indirectly related to its use.
Is it possible to get a credit card without changing banks?
The answer is yes. Many institutions in Portugal will provide you a credit card without having to change banks. In these cases, in order to subscribe to the credit card, the consumer will have to indicate the number of his current account to the issuing entity so that they can carry out any collection operations needed regarding the use of the credit card.
What are the differences between Visa and MasterCard credit cards?
The main differences between Visa cards and Mastercard cards are the benefits given to each of their cardholders. For example, Visa cards have better car rental insurance than the MasterCard network, however, this advantage is not available in all countries.
Regarding premium cards, the advantages are related to personal assistance services, such as access to shows tickets, restaurant reservations and hotel recommendations.
Nevertheless, having a product from any of these issuing networks means having an international credit card, as Visa and MasterCard are the most widely accepted means of payment in any country in the world.
How does credit card payment work?
When choosing a credit card, you can decide to pay for what you spend with it either at the beginning, middle or end of the month. Also, the amount can be reimbursed in full, in a percentage or just the minimum, whereas the payment method can vary from direct debit, money, check, bank transfer, payment in ATM to even homebanking.
Opting for the full payment of the credit card balance at the end of each month means that you will not pay any interest on your spending. In turn, the partial payment implies that the user pays interest on the amount of credit that was not settled in the previous month.
In this sense, the less you choose to pay per month, the more credit card interest you will have to pay and the longer it will take you to settle the entire amount owed.
In conclusion, there is really only one answer to how to get a fast and easy credit card without generating high debts: one must always opt to pay the maximum possible percentage of credit in debt at the end of each month, preferably 100%.
Is it possible to apply for an online credit card?
Yes, it is. In fact, applying for an online credit card is a simple process. Many of these online credit cards don’t have annual fees and any consumer can order them safely through the Internet.
With ComparaJá.pt you can quickly request an online credit card of any type - with airline miles, loyalty points, discounts or a cashback card - and complete the whole process without ever leaving your home.
In order to do this, one will only have to make a simulation of credit cards in our platform to promptly identify the best credit card according to one’s needs and wants. At last, one can subscribe the desired card with just a click of a mouse – it really is that simple, just try it yourself.
Finally, after fulfilling the requirements of the financial institution issuing the credit card chosen, you should receive it in your mail box within a few days.
How to use ComparaJá.pt credit card simulator?
Our credit card simulator allows you to compare all credit card deals in the Portuguese market quickly and, ultimately, it will help you find the one that is most suited to your profile and needs.
After answering just three questions regarding your personal and professional situation, you will be presented the credit card results table that compiles all the credit cards on the market. From there, you can easily filter your choices by card type or provider.
Once you have identified the best credit card for you through our simulator, you just have to click on the button "Continue" and then complete the data requested by the financial institution and you will have purchased your credit card online without any additional costs.
What is the difference between cancellation and non-renewal of your credit card?
If you wish to cancel your credit card, simply call the card issuer and this annulment will take effect immediately after the request. On the contrary, if your purpose is to not renew your credit card, then this cancellation will only take effect on the renewal date (which is inscribed on the card itself).
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