There are more than 200 credit cards offered by banks in Lebanon in Dollars, Liras, Pounds and Euros. Which one to choose?
First of all, a credit card allows you to use money you don’t have so that you can pay for purchases or even make a cash withdrawal from an ATM machine. In other words, every time you use a credit card you are taking a small loan (a credit). All the amounts of money you have used your credit card to cover for over a period of time add up and you reimburse them in small payments that you have to make periodically (usually between 10 or 60 days depending on the card). Just taking any other loan, you have to pay interest on all amounts you have used your credit card for.
So many questions: Credit card cost? Interest charges? Maximum amount you can use it for? Any advantages and benefits? Where do I get it from? Etc. We will help you answer all these questions below:
How much does a credit card cost?
The price of a credit card is paid once per year. Usually the price of credit card depends on the amount that it allows you to use it for. For instance, a credit card allowing you to use it for an amount of 5000$ would cost more than a credit card allowing you to use it for 2000$. The prices of credit cards offered by Lebanese banks range from nothing (0$) to about 500$ with the price of a standard credit card at around 50$ per year.
What is the maximum limit of a credit card?
Usually the maximum amount you can use a credit card for depends on how much money you have in your accounts and your relationship with your bank. The more money you have and the better your relationship with your bank, the higher the limit of your credit card maximum amount will be. The maximum limit can range from as low as 300$ to 50,000$. Cards with higher limits are usually branded as “Gold” or “Platinum” internationally and in Lebanon as well.
When and how do you have to pay the money back?
To reimburse the amount of money you have spent using your credit card you have to make small periodical payments at your bank. The amount you have to pay is usually a percentage of the total you have spent using your card or a pre-defined minimum lump sum (ex: 10% of the amount but not less than 20$). These can range from 3% of the used amount with a minimum of 10$ to 10% with a minimum of 100$. In Lebanon, the period for you to make the payment can go from 30 to 56 days.
Some banks require you to make the payment on fixed day every month (ex: on the 5th of each month)
What is the interest rate that you pay?
The interests you have on amounts used through your credit card in Lebanon are usually monthly. So do not be fooled by an interest rates as low as 1% because these are calculated monthly. Indeed, a 1% interest rate calculated monthly is equal to a 12.7% annual interest rate, so if you have a card with a 1% monthly interest rate, it is as if you are taking a loan at 12.7% interest per year which is high. Also avoid using your card to withdraw cash from an ATM as interest rates on such withdrawn amounts are usually higher that than on amounts used when you pay with your credit card at a merchant.
What benefits do I get for using my credit card?
In order to encourage you to buy a credit card from most banks in Lebanon offer you very interesting benefits. These can include discounts in stores, free call minutes to use on you mobile phone, points that you can exchange against gifts or free air miles that you can travel with a specific airliner (in Lebanon it's usually Middle East Airlines).
We will be giving you more specific tips about all the issues addressed above. Meanwhile, do not hesitate to ask us any question by posting in the comment box below!