The credit card has a very simple operation. A certain amount is made available to the customer in the form of credit and, with the card, the customer accesses this amount and purchases, committing to pay the debit with the operator of the card on the date established for its expiration. If the invoice is paid in full, there is no interest charge. If the minimum amount is paid or no amount is paid, interest is charged on the amount due. And therein lies the danger of misuse of credit cards: by not being able to pay your debt, the client will be subject to very high interest rates.
The consigned credit card is based on the same principle of offering the customer a certain amount in the form of credit, which can be used by card. The difference is that this credit is compulsorily tied to the customer’s payment and is discounted in the form of sheet, as is usually done in consigned loans.
Difference between loan and payday loan
Although both are based on direct debit payroll deduction, payroll deductible loan and paycheck deductible credit card are in some ways different in starting by their nature. While in the loan the credit converted into value is delivered directly to the requester, the credit card will be used to pay your bill, accumulated throughout the month. The practical consequence of this difference is the lower interest charge on the loan and, on the part of the card, a lower percentage of the payable wage.
When is payroll deductible credit card profitable?
If compared to overdraft, conventional credit card or even personal loan, payday loan is the best option. Because it is tied to the customer’s due date, it guarantees the operator that the payment will be made, which allows the collection of interest lower than the other modalities mentioned.
In addition, by preventing late payment or even the minimum payment of an invoice, paycheck cards help to avoid excessive debt of its users, since they prevent the formation of so-called snowball debt.
Another great advantage is the absence of annuity rate, common among conventional cards. In addition, a card is possible even if the customer’s name is denied to credit protection services. It is worth remembering, once again, that being tied to the payment of the customer is a guarantee strong enough for the card companies.
Is There A Disadvantage In Payroll Credit Card?
The only disadvantage is in relation to the payday loan. As already mentioned, the loan charges interest rates even lower than those of the card. Among the usual credit options, it is the only one that is currently more advantageous.
However, it is worth remembering that loan and card can have their combined use. With a limit of 35% of the wage assignment established by law, a loan of only 30% is allowed by loan, and the remaining 5% is exclusive for consignment via card.
Undoubtedly, paycheck-deductible credit cards appear as a great credit option in the market. Of simple use and advantageous for both clients and operators, this mode promises to gain more and more space.