Loan Types in Thailand

What are Credit Cards?

A credit card allows you to loan from financial firms to purchase goods and services today while paying for them later. People use credit cards for restaurant meals, flight bookings, petrol, utility bills, and even online shopping. Others reserve their credit cards for only more expensive purchases such as cars, a trip around the world, or items that would usually take months to save up for.

Through a credit card, banks simply lend you money that you don’t currently own so you can buy whatever you need immediately and delay paying for it by a month. You can even pay for your purchases later on through monthly instalments until you zero out your outstanding payment balance.

Why do people apply for credit cards?

People apply for credit cards because credit cards provide their owners with convenience and instant
gratification. As a credit card holder, you can buy whatever you want to on the spot without having to wait for your next paycheck to save enough funds. Additionally, some people apply for credit cards to accumulate reward points, discounts, cashback benefits, and other exclusive promotions that only come with signing up for a credit card.

A lot of people also apply for credit cards so they will have an emergency fund in the case of unexpected
expenses such as accidents, sicknesses, or car and home repairs.

How do I use a credit card?

1. Select an item you wish to purchase.
2. Figure out how you are going to pay for it in monthly instalments until you complete your payments.
3. Finalize your payment by handing your card over to the cashier.
4. The cashier will then print two copies of the receipt and give them to you together with your card.
5. Check the amount charged on the receipt. If it is correct, sign both copies. Keep one copy to yourself and hand the other one back to the cashier.
6. Keep all your receipts to keep track of all your credit card transactions.

How do I use a credit card online?

• Before making a transaction, make sure that the merchant you are dealing with is credible and trustworthy.
•  At the merchant’s payment and check-out page, make sure that the website is secure by looking for https:// at the beginning of the URL.
• Never forget to examine your monthly billing statements to ensure that there are no errors or suspicious activities were not authorized by you.
• Never send your credit card details through e-mail to prevent hackers and malicious programs from making fraudulent transactions using the details you have stored in your e-mail account.

How do I apply for a credit card?

Applying for a credit card is an easy process. The steps are as follows:

1. Research.

Before applying for a credit card, make sure you have a clear idea of what you plan to do with it. Try to think about which type of credit card would suit you best. Are you looking for a credit card with lots of reward points and cashback benefits? Are you looking for a credit card to be used in your business? Or are you looking for a credit card to increase your purchasing power? Have a list of questions you want to know about credit cards and ask them to credit card sales officers. Also be sure to know the details regarding each card’s annual fee, payment due dates, how long it will take before interest rates apply, and other important matters which are often hidden in the fine print. Compare the advantages and disadvantages of each issuer’s credit card before deciding which card will work best for you.

2. Prepare for a credit history background check.

Banks will check your credit history because they want to know whether or not you have to ability to pay the monthly instalment fees. The chances of your credit application being approved greatly increase when banks learn that you have a good credit score and have always paid your bills on time. Your credit history will also include past loans that you have made. Other than your credit history, banks will also want to know your occupation, monthly income, and age.

3. Decide on how you want to apply for your credit card.

Once you have decided where you want to apply for a credit card, the next question is how you are going to do so. Nowadays, online applications are common, offering a convenient and faster alternative to going to an actual bank. Our Credit Card Comparison Platform can help you out with this.

4.  Double check everything before submitting the required documents.

To avoid rejection of your application or the hassle of the bank officer returning your form because it was incomplete, make sure to double check everything before submitting the required documents. Make sure you didn’t miss any fields or misspell any details. Double checking your application can save the time it will take to resubmit the requirements again if you happen to make any errors.

To avoid rejection of your application or the hassle of the bank officer returning your form because it was incomplete, make sure to double check everything before submitting the required documents. Make sure you didn’t miss any fields or misspell any details. Double checking your application can save the time it will take to resubmit the requirements again if you happen to make any errors.

What are the requirements in applying for a credit card?

To be able to apply for a credit card, you will generally need the following:

• Application form.
• A photocopy of your government-issued ID card (or passport and work permit if you are an expatriate).
• A photocopy of your household registration form.
• A copy of your savings or fixed account statements for the past six months from a bank or financial institution.
• Proof of income.

Exactly how much can I borrow using my credit card?

Your maximum credit limit, or the maximum amount you can borrow or spend on your credit card, depends on the type of card you have applied for. Once your application has been approved, you can call to ask your sales officer about your card’s maximum credit limit or any other details you may want to know.

What are the different types of credit cards?
Here are some of the different credit card categories:

• • Classic Credit Cards
    Classic credit cards are the most basic types of cards. They provide card holders with basic need of having extra money and extending your line of credit in the case of emergencies or whenever they are still waiting for their other sources of income to arrive.

• • Premium Credit Cards
    Premium credit cards such as Platinum, Gold, or Plus cards, are cards for applicants with relatively high credit scores, and are granted to individuals with a certain amount of income. Although premium cards are subject to higher fees and charges, they offer more benefits as well. Their extensive reward programs include special rewards like freebies, discounts on selected items, travel perks, hotel accommodation upgrades, and many other offers.

• • Lifestyle Cards
    Lifestyle cards are created to accommodate to a certain lifestyle and are thus more personalized than general credit cards. For example, some cards are personalized for shopping and others are created specifically for loading up at gasoline stations.

• • Business Credit Cards
    Individuals who intend to use their credit cards especially for business transactions such as flying out of the country for business trips should consider applying for a business credit card. Business credit cards offer air mile benefits and cash back points.

What are the credit charges and fees I should be aware of?

Once your credit card application is approved, you should be aware of all the fees involved. Here are some of the major fees associated with using a credit card:

• • Annual Percentage Rate (APR)
    The annual percentage rate, or APR, is the interest rate you are charged when you don’t pay your monthly bills in full. If you miss paying your dues this month and the balance is carried onto the next month, you will have to pay interest on the outstanding balance. If not closely monitored, rates can balloon to more than 40%, which is why it is always best to pay your bills in full each month, even though only a minimum payment is required.

• • Annual Fees
    To continue enjoying the benefits your card offers, you are required to pay an annual fee for every year of use. A lot of credit card companies waive the annual fee for the first year of use, meaning you start paying when your card reaches the second year. Annual fees range from THB 200 to 5,000.

• • Balance Transfer Fees
    If you already have a credit card but are being charged a high interest rate and want to lower your interestrate to zero, you can use a balance transfer to a new card. You can also do this if you possess a number of credit cards but want to pay for your outstanding balance using just one card. Usually, you are charged a balance transfer fee of around 2% of the outstanding balance you transferred.However, keep in mind that the amount you can transfer is limited by the new card’s credit limit as well. If you already have a credit card but are being charged a high interest rate and want to lower your interest rate to zero, you can use a balance transfer to a new card. You can also do this if you possess a number of credit cards but want to pay for your outstanding balance using just one card. Usually, you are charged a balance transfer fee of around 2% of the outstanding balance you transferred. However, keep in mind that the amount you can transfer is limited by the new card’s credit limit as well.

• • Cash Advance Fees
    There may be times when you will need immediate cash. When you use your credit card at an ATM to withdraw cash in advance, you could be charged a fixed fee per transaction or an interest rate as high as 4% of the amount you withdrew, whichever is higher. You are also charged additional fees based on how long it takes you to repay the cash from the date of withdrawal. Thus, it is not recommended to take on a cash advance using your credit card.

• •  International Transaction Fees
    As expected, using your card abroad entails additional charges. To prepare for this, it is advisable to call your issuer to ask about international transaction fees associated with using your credit card abroad. International transaction fees are usually about 3%, but can increase quickly with frequent use.

• • Overlimit Fees
    Usually, your transaction won’t go through if you have reached your credit limit. However, if it does go through, you will have to pay an overlimit fee. Stick to your credit limit and control your spending habits to avoid unnecessary fees.

• • Underpayment Fees
    If you forget to make the minimum monthly payment required, you will be charged an underpayment fee in addition to the usual interest rates.

The important thing to remember about these fees is that each credit card company has different terms and conditions, and sales officers don’t always tell you everything you need to know. Make sure you read all the details or consult a financial expert so you can have clear idea of exactly how much you need to pay for using a credit card each month.

So which credit card brands charge which transaction fees?

To compare the different charges and fees associated with each credit card in Thailand, we suggest you to use our Credit Card Comparison Platform, which will give you a side by side comparison of all the major credit cards in Thailand and their fees.

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