The Czech population is not financially more literate than 9 years ago. This somewhat cruel assertion came from the Czech Banking Association after evaluating more than 1,000 citizens’ answers to finance questions in cooperation with MC&S.
Not all questions related to credit cards, but it turned out that more than half of those surveyed did not know the difference between a credit card and a debit card . And that is a lot, given that more than 2 million Czechs already pay with credit cards.
The interest-free period is also a big unknown . Even in 2013, two-thirds of Czechs did not know what we were talking about.
How a credit card works
We described the operation of the credit card in an article saying that he is a good servant but a bad master . Nevertheless, it does not hurt to repeat some basic information.
The main difference between a credit card and a debit card is that you use the money in your account to pay with your debit card. But when you take out a credit card at the cash register, you take a loan from your lender up to the limit set.
Of course, you have to repay the loan, but if you do it during the interest-free period , you do not pay an extra crown. The money was simply borrowed for free. Even before the payout, you do not have to miss a new camera for a great price.
Withdrawing cash from an ATM is possible with a credit card, but as withdrawals are not subject to an interest-free period, they do not pay off. All the more advantageous are purchases from business partners who provide interesting discounts . Credit card holders also often return percentages of purchases and enjoy other bonuses.
Test your knowledge
Consider which of the following 10 statements are true and which are not. At the end of the article you will find a solution.
- The length of the interest-free period is always different.
- There are more credit than debit cards in the Czech Republic.
- The interest-free period applies to ATM withdrawals.
- A credit card works essentially like a loan.
- You pay back a percentage of the purchase price when you pay with a debit card.
- I can’t have multiple credit cards at the same time.
- If I do not repay my obligations by the last day of the interest-free period, I will start accruing interest from the following day.
- There are also credit cards that do not have an interest-free period.
- Czechs call “credit cards” debit cards.
- The interest-free period is shorter with each day.