What is a revolving card and how does it work? We are sure that you have heard the term revolving card recently and that you are a user of a debit or credit card.
Cards are an essential instrument in daily operation in physical and electronic stores. One of the most widespread modalities currently are revolving cards, a type of credit card that allows you to have money for purchases and return it progressively.
But recently and as a result of the ruling of the Supreme Court of March 4 , the revolving cards have jumped to the news. In this article we want to inform you about what revolving cards are and how they work and how they differ from common credit cards.
What is a revolving card?
A revolving card is a card that has a consumer credit that we can use totally or partially and manage the terms in which we are going to return it. We can make any type of purchase and the payment will be automatically deferred allowing payment little by little.
Revolving cards have a credit amount and, as we charge the card, the amount available will decrease. As we pay it back, the available credit will increase again.
This system allows us to choose how we are going to return the money consumed, being able to choose to return a percentage each month, within a minimum of 5% and 20% of the total, or a fixed amount, within a minimum and some maximums that each card sets.
This type of consumer credit card has the particularity of offering flexible payments, which means that, if we cannot pay for a month, we can defer payment by paying extra interest.
Another of the peculiarities of revolving cards is that they can be issued by both a bank and a business or brand. Thus, we find revolving cards with the names of train companies, airlines, hotels or even supermarkets . All of them agree that it is not a bank that is behind financing the credit, but rather a credit institution.
In summary, a revolving card is a flexible consumer credit card that allows us to choose how much and when we are going to return that amount.
Advantages and disadvantages
Advantages of the revolving credit card:
- A revolving card offers a personal credit that we can use partially or totally when we need it
- It allows you to pay in proportional installments (a percentage of the total) or a fixed amount per month
- Unlike conventional credit cards, they allow you to buy now and pay later and in installments
- Some revolving allow deferral of payments
- They are issued by both banks and companies, shops or large stores
Disadvantages that you must take into consideration when choosing a revolving card:
- Interest and commissions are updated month by month
- The fragmented payment of the total can eternalize the repayment of the debt
- The interests are much higher than those of a loan or a conventional credit card
- In case of postponing a payment, the interests to pay are very high
What is better, a personal credit, a traditional credit card or a revolving card?
Every time we apply for a personal loan, we must decide what we want it for and request only what we need. Traditional credit cards simply defer payment for a purchase at the end of the month, but they have the advantage of low interest rates. In this article you will be able to compare what would be better for you, a loan or a credit card .
Revolving cards offer immediate liquidity in exchange for high interest rates , but much higher flexibility than what we can have with a credit card or traditional personal credit. Its disadvantage is precisely in the high interest rates, which are updated monthly and which can end up taking too long.
The fast credit web pages that we analyze offer conditions very similar to those of revolving cards and we always recommend that you only request the amount you need and can return. The main advantage of fast credits over revolving cards is that we have peace of mind to return what we request.
We hope we have clarified what a revolving card is and how it works and, above all, that you are clear when you can and how you should use it.