What is a credit card and how does it work?
A credit card combines a payment card, a line of credit, and various benefits and supplementary services, such as insurance. When you make credit card payments, you actually do not use your own money – you use the bank’s line of credit.
By using a credit card, you can benefit from an interest-free period (or grace period) of up to 45 days – no other consumer loan can match that. If you repay the whole outstanding balance within the relevant grace period, you will not pay any interest at all. You can also pay it back gradually; in such case, we will charge you interest based on your interest rate.
With various supplementary services, a credit card can be quite useful at home and away from home. For example, you can use free locksmith services, if you find yourself locked out of your house, or travel without worries with complimentary travel insurance with your card. You can also benefit from various discounts of as much as 50% at designated merchants or contribute to your supplementary pension insurance by simply using your card.
A credit card has Internet and POS payments written all over it. It can also be used for cash withdrawals, but you should actually limit those. There may be fees associated with ATM withdrawals when using some types of credit cards.
Moreover, a credit card is also great as a primary card for hotel reservations or car and boat rentals. Since the bank provides a line of credit with your credit card, it guarantees that you are a credible and creditworthy client.
Why is it useful to have a credit card?
- You will appreciate it at home and away from home with its wide range of supplementary services.
- It is a great help when you wish to keep your finances separate and keep track of your monthly household spending, for example.
- A credit card may also be of help, if you need to replace a home appliance. You can purchase it right away, without the need to deal with hire purchase arrangements.
- There is no other consumer loan you could use free of interest for up to 45 days.
When can a credit come in handy?
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What are the benefits of credit cards?
KB credit cards offer many different advantages and benefits, depending on the card type you choose. Here are some examples of benefits available with credit cards:
- 1% contribution of credit card payments to supplementary pension insurance – up to CZK 500 a month
- Discounts of as much as 50% in stores and online in more than 10,000 stores throughout the Czech Republic and Slovakia
- Insurance for purchased goods and services (e.g. warranty extended by 1 year, online shopping insurance or low price guarantee)
- Handbag insurance (incl. the handbag contents) for the event of burglary
- Home Assistance (e.g. in the event of household emergencies – locksmith services, plumbing and painting) and Lifestyle Assistance (e.g. ticket or hotel reservations, home delivery services)
- Payment protection insurance
- Airport lounge access
- Grace period of up to 45 days – also for cash withdrawals
- Automatic payment of the full balance during a grace period (available)
- Low minimum monthly payments
- Simple control and settings using Internet or mobile banking applications
- Instant changes of credit card parameters (e.g. enable payments on the Internet or increase payment limit)
Is credit card a loan?
Yes, from a contractual perspective. However, if you repay your balance during a grace period, you will not pay any interest at all.
Where can I use a credit card?
A credit card may be used as any other payment card – i.e. to make payments in stores or on the Internet and to make cash withdrawals anywhere in the world. You can simply use it anywhere you see your card’s logo (Mastercard or Visa).
Moreover, you can make a hotel or car reservation with a credit card. Some car rental services or hotels do not accept debit card reservations.
Can a credit card be used for cash withdrawals?
Yes, it is possible to make cash withdrawals and transfer funds from a credit card to any current account.
However, it is primarily intended for shopping. This is why cash withdrawals and transfers are usually subject to a fee.
One of the benefits of KB credit cards is also the fact that a grace period also applies to cash withdrawals and transfers. Some banks charge interest on these transactions from their date.
Are credit card payments secure?
Yes, credit card payments are absolutely secure. However, you should always be cautious and follow safety and security rules when using credit cards. In case of payments on the Internet, we advise you to use online stores that support the 3D Secure technology. These stores feature the following logos:
You may also encounter previous versions of the logos.
If your card is used without authorisation, the bank guarantees a refund.
Moreover, your own money is never at risk with a credit card, since you use a line of credit provided by the bank.
Can I also make large purchases with a credit card?
Yes. You can use a credit card to make large purchases and then spread the relevant payments over a longer period of time. In order to maximise the benefits of your credit card, we advise you to pay large purchases off in no more than ten instalments.