Credit Card

Credit Cards are a type of modern plastic money. They come with a concept of buy now, pay later. Banks give these cards to the customers with specific eligibility and documentation to use for various personal reasons. By using these cards customers can pay for goods on credited amount by banks. In simple words, bank gives specific amount as credit or loan to the card holders to use for their utility. Customers can use this credit amount for their needs and pay back the borrowed amount to the banks before the next scheduled billing in lump sum or as EMIs. Customers have to pay a specific interest rate on borrowed amount. They are also given a specific limit of amount in which they have to limit their use. You can use a credit card around the world. Banks offer different types of credit cards for different purposes. It's always a feasible option to carry a credit card instead of carrying a roll of cash. Many prefer credit card over debit card as it allows using the card on credit.

What are the features of a Credit Card?

• You can use a credit card for international purchases.
• You can pay your credit card bill in installments just like you pay off a loan. Banks charge interest rate when you decide to pay the bills via EMIs.
• You can pay your utility bills online by using credit card.
• You receive SMS and e-mail from bank every time you use your credit card and when your bill payment is due. This helps you to pay your dues on time and keep a track of your spending.
• Many banks provide lost card liability coverage to the credit cards. That means if you lose your credit card or if it gets stolen, bank protects you from fraudulent transactions. But this happens only if you report the missing card.
• You can use your credit card as a debit card to withdraw money from ATMs. Banks charge nominal fees for the same.
• Many banks offer a 24*7 customer care service to their credit card customers. You can call anytime to their special help lines to solve your credit card issues.
• You can pay your credit card bills by cheque or by online payment. Banks offer a specific period of time to pay the bill after issuing the bill. This period is known as grace period. If you do not pay your dues before the grace period ends, banks charge you with interest or other financial fee.
• You also have to pay government decided service tax on each of the credit card transaction.
• You can make your transactions in domestic currency (Indian Rupee) or foreign currency (Dollar, Yen, Euro etc.)

What are the benefits of a Credit Card?

• Credit card is one safe option to transact online or in person. Instead of carrying cash, spending only the funds deposited in your account or paying cash on delivery for online transactions, you can simply use your credit card for all your needs.
• You can use your credit card for any financial emergencies.
• Banks offer various types of discounts, reward points, gift vouchers, bonus points, lifestyle benefits, travel benefits, airport lounge access, air miles, cash back benefits etc. On their best credit cards

What are the Eligibility Criteria to get a Credit Card?

Banks offer credit card to its customers who fulfill their designed eligibility. The eligibility criteria changes from bank to bank and the profile of the borrower. But there are some commonalities which you have to follow or acquire to get a credit card from any bank. The common and generic factors are listed below. These are the generic eligibility criteria to avail a Credit card:

• You have to be an Indian citizen.
• You can use your credit card for any financial emergencies.You should have a good savings history along with professional stability.
• Your age should be above 21 years.
• You should have an existing and active savings account.
• You should have a strong credit or CIBIL score.

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What are the charges applicable on the use of a Credit Card?

Banks charge credit card holders with various types of fees. Some of them are mentioned below:

• Joining fee: Every bank charges joining fee when they issue a credit card.
• Annual fee: Every bank charges a specific amount of fees once a year as annual fee. You can renew your credit card by using this fee. Many banks offer their best credit cards to their privileged customers who do not need to pay any annual fee.
• Paper statement fee: Now-a-days bank send you online statement of your transaction bill. But many times card holders ask for paper copy or a hard copy of their credit card statement bill. Banks charge credit card holders for the same.
• Late payment fee: Many times card holders miss the credit card payment deadlines. Then the banks charge them with a late payment fee along with the designated interest rate.
• Cash withdrawal fee: You can withdraw cash at ATMs using your credit card. But as it's not the original purpose of the credit card, banks charge a fee for this additional feature. So every time you withdraw cash using your debit card, banks charge cash withdrawal fee.
• Service tax: Every time you make a transaction using your credit card, you are charged with government designated service tax.