Архив постов: April 2022

The main risks of operating with credit cards

April 28, 2022credit cadrs

Credit cards are a financial product that suffers more risks and greater exposure than other products. Let’s get to know the main risks of credit cards.

If there is a financial product that has suffered an exponential growth in fraud and crime in recent years, it is certainly that of the different branches of credit cards. Although it is true that the application of new security measures has been noted for all purposes in this product, it is no less true that fraud models and technological implementations in this sense mean that the user must take special care in their relationship with the cards and their use.

In our country, which is by no means unaffected by the growth of these crimes throughout Europe, there are certain threats that are more present than others, but which ultimately require the same precautions. We will try to identify the main dangers to credit cards, as well as possible solutions and prevention models to avoid fraud.

The main card risks

In addition to the above, it is necessary to take into account crimes such as the substitution of ATM access systems as an instrument to obtain the necessary data for any of the above mentioned dangers, this is a method not so frequent, but also quite widespread during the last years.

How to protect yourself from card risks

All credit cards today have better levels of security than in the past. From the incorporation of the so-called smart chips to the immediate card blocking systems after the communication of the incident by the user. However, it is the latter, the speed of response in the event of an incident, which is particularly relevant. We must bear in mind that by applying all the security measures, if we carry out the protocol of immediate communication of a disappearance, theft or possible fraud, the responsibility derived from the misuse of the card is limited in a very notable way for the user, which can suppose a serious risk against our patrimony.

Finally, any anomalous circumstance, either at an ATM or when faced with a payment at a POS that we find dubious, it is preferable to opt for other options or even to contact the authorities if we are really convinced of the possibility of card fraud, in any case, whenever our card has suffered any incident that leads us to think of possible fraud, it is preferable to automatically contact the issuing entity and block the product.

Are free credit cards really free?

April 21, 2022free credit cards

Are free credit cards really free? Free of charge in financial products is a relative issue, a very relative issue. We would dare to say that there is nothing free in financial products, and yet we are constantly offered free credit cards. It is necessary to stop and think about what this freeness really consists of, if, we repeat, we take into account that there is nothing free in financial products.

From the outset, it must always be clear that when we talk about free of charge, we are talking about certain particular aspects of the product, generally commissions or associated expenses. This is important because no credit card offers free of charge, for example, in all its credit operations, cash withdrawals, etc., i.e. the interest, commissions and expenses associated with the operation of the card are hardly going to be part of that free of charge.

Free cards without commissions

Therefore we come to the heart of the matter, what we are usually offered as free cards are really cards to which a bonus is applied on the commissions or expenses.

Generally we will find three different models within this free card:

We will be able to find any of these options although, probably the most present in the market is the second one, that is to say, the one that proposes its contracting without issuance cost, a period without application of maintenance commissions, and the subsequent annual maintenance commission.

We can also find within this last format some exceptions or bonuses, for example those that offer us the possibility of not paying a maintenance cost for the card as long as it involves a certain number of uses, of a certain amount in a specific period of time.

Free cards and their use

We can distinguish two very different types of dynamics of use of these cards without commissions.

The first is the linked card. This is a product that is part of a set of products and, generally, its bonus in the form of the absence of maintenance and issue fees is related to this linkage. In this model we can perfectly well find the non-requirement of use to maintain the gratuity, since this is obtained through the general linkage of the user and not only for the card.

The second model, as might be expected, is the one that associates the use of the card with its free use. In other words, for the card to be used free of charge, it will have to be used either a certain number of times within a specific range of transactions, or on a specific amount set by the bank.

It is true that, on some occasions, on the contrary, it will be the card and its use that will determine the bonus on other products, for example, in mortgages where we can obtain a modification to the differential with a certain amount of money, linked through the credit card, however, this is not the case here.

Reasons to use virtual cards

April 14, 2022virtual cards

Reasons to use virtual cards. Internet payment methods have multiplied exponentially with the Coronavirus crises. This is a normal response to the growth of e-commerce and its acceptance by the user. Within these payment methods, the virtual card continues to gain a very important share of the market.

It is a product that offers great advantages when making purchases on the Internet, although it is true that not all cards work in the same way.

What are virtual cards and how do they work?

It is really a very simple mechanism of operation. A bank card is created with all the usual data for this type of product, identification numbering, expiration date, CW2… in some cases it will be a physical card, with just one basic difference, it does not have a magnetic strip, in other cases the card will not even exist other than having the aforementioned data attributed to it.

In any case it is a product of exclusive use for purchases through Internet or remote payments, since, for example, it can also serve perfectly well for a payment via telephone of a bill.

These are prepaid cards, i.e. cards in which there will only be the available amount that we had previously charged, and therefore, in the worst case, it will not have any impact on the balance or credit of our accounts in which it is associated.

How much does a virtual card cost

Generally it is going to be a free card, or the one that will not be charged neither maintenance cost nor subscription cost. However, at the time of requesting the contracting of one of these products, we must bear in mind that some entities charge commissions on the operations of load of the card, that is to say, every time that we recharge our card we will pay a commission offered by operation, this, we repeat, is in some offers since we will also find in the market proposals that do not require us any commission for the operations and are totally free to all effects.

Are prepaid cards cheap then?

Undoubtedly this is a very cheap card model, if not the cheapest. You must think that this card only works through the recharges it makes, these recharges in turn are made against your bank accounts or credit cards, but initially there is no cost or commission for the recharge so, really, you will only assume the expense you make, nothing more.

On the other hand they are not cards that come to present costs of maintenance nor of initial hiring, for which, neither in this sense they contribute more expense than any other type of card, in fact they generally contribute less.

Finally, if we think of them as an important element to be able to control our expenses much better, and therefore, to save being beneficial for our pocket, the circle closes and effectively we can speak of being in front of a cheap product and with benefits, even above the traditional debit card, since in this case the expense is exclusively limited to what is foreseen.

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