पर्सनल लोन के फायदे और नुकसान | Personal Loan ke Faide aur Nuksan

 Everything You Must Know about Credit Card in India

 

What is Credit Card ? 

 A credit card is a small rectangular piece of plastic or metal provided by a bank or financial services organisation that allows cardholders to borrow funds to pay for products and services at card-accepting merchants. Credit cards require cardholders to repay borrowed money, plus interest and other fees, on the billing date or over time. Example: Chase Sapphire Reserve.

Credit card issuers may also provide cardholders a separate cash line of credit (LOC), allowing them to borrow money through bank tellers, ATMs, or credit card convenience checks. Cash advances offer different terms than credit card transactions, such as no grace period and higher interest rates. Issuers set credit-based borrowing limits. Most companies accept credit cards, which are still one of the most common ways to pay for goods and services.

Credit cards often have higher annual percentage rate (APR) than other consumer borrowing. Unless past outstanding sums have been carried forward from a previous month, there is no grace period offered for new charges.

Credit card issuers must offer a 21-day grace period before interest accrues on purchases.

Paying down bills before the grace period ends is a smart habit. It's crucial to know if your issuer accrues interest daily or monthly, as the former means larger interest charges for unpaid balances. This is crucial if you want to transfer your credit card debt to a card with a reduced APR. Switching from a monthly to a daily card could invalidate lower-rate savings. 

Types of Credit Cards in India

Visa, Mastercard, Discover, and American Express are among the most popular credit cards. Many credit cards provide rewards like airline miles, hotel stays, gift certificates, and cash back. These are rewards credit cards.

Many national retailers issue store-branded credit cards to build consumer loyalty. Although shop credit cards are easier to qualify for than major credit cards, they can only be used at the issuing retailers, who may provide cardholders privileges like special discounts, promotional notices, or promotions. Large retailers provide co-branded Visa or Mastercard credit cards that can be used anywhere.

Secured credit cards need a security deposit from the cardholder. These cards have limited credit lines equal to the security deposits, which are generally repaid if cardholders use them responsibly over time. People with limited or low credit want these cards.

Prepaid debit cards are secured payment cards, similar to secured credit cards, where the available funds match the funds in a linked bank account. Unsecured credit cards don't require collateral or deposits. Secured cards offer greater credit lines and cheaper interest rates.

When credit card started in India ?

Ans. In India, Andhra Bank was the first to introduce credit cards in 1981.

 

How many credit card users in india ?

Ans. In financial year 2021, nearly 62 million credit cards were in use in India.

 

 Why credit card is important?

 A credit card provides a card holder up to 50 days of interest free credit, if the entire balance is paid before the due date. The main difference between a credit card and a debit card is that a credit card is a Buy Now, Pay Later (BNPL) instrument, while with a debit card, the money is taken right away from the customer's bank account.

Banks will also take a minimum payment, such as 5–7 percent of the bill, and carry the rest over to the next month. But the interest rate, which ranges from 1.5% to 4% per month, is too high to be worth it. It is always best to pay credit card bills on time and keep your credit history in good shape.

You can use the card to get cash from ATMs for a set fee when you need it most.

Parents often give their children low-limit credit cards as a way to teach them how to use plastic and instil a sense of responsibility.

Features of a Credit Card

• Credit limit: Your card's transaction limit. Banks increase credit limits for cardholders with good repayment histories.
• While there are a few no-joining-fee Credit Cards, most have yearly and joining fees. Basic cards cost Rs 500 per month, whereas premium cards cost tens of thousands. In some circumstances, a charge waiver is available with a minimum spend.
• Monthly credit card statements are generated on a set date. 15-20 days after billing, bills are due. Credit card bills have a 50-day grace period.
• Interest rate: If you exceed the free credit period on your credit card, you will be charged interest. Monthly interest accrues until the debt is paid off. Always pay on time. Financial discipline builds credit.
• Paying the minimum owed delays credit card payments. The balance is rolled over at excessive interest rates.
• Overseas travellers should check the foreign currency mark-up cost, which may be 2% to 4%.
• Each card has rewards and perks for a specific group of users. Choose a card that matches your spending to maximise benefits.
• Select two to three cards from different categories (travel, fuel, lifestyle, online shopping) to maximise advantages. Make sure the cards don't have the same settlement date, i.e. 15th or 30th. Thus extending free-credit periods.
• Even though your credit card has a CVV and chip/magnetic strip, maintain security hygiene. Use reputable stores and websites. Check the POS details before entering your PIN. Never give out card PIN or CVV. Saving the card issuer's helpline number can enable quick action.

 

Why credit card is bad ?

1.  Interest charges : Credit card interest is the most obvious downside. High credit card interest rates can deepen your debt if you're not careful. So, there's hope. You won't pay interest if you pay off your balance every month. If you have good credit, you may qualify for a card with a 0% APR introductory period, allowing you to finance a major purchase without interest.
2. Overspend : Some people find credit cards too easy to use. Without upfront cash, you can separate from your expenditures. Not being careful can lead to suffocating debt. It all comes down to money management.
3. Late fees: Late payments might cost as much as $40. Repeat violators face steep fines.
4. Credit risk : Credit scores essentially assess your ability to borrow money. Credit card use builds credit. This is why irresponsible card use can ruin credit. High balances, late payments, and new card applications lower your score.

What is credit card cash withdrawal charges ?

Cash advance fee: This is the fee charged every time you withdraw cash using your Credit Card. It's usually between 2.5 and 3 percent of the transaction amount, with a minimum of Rs 250 to Rs 500, and it's shown on the billing statement.

What is credit card jumbo loan?

Credit card Jumbo Loan is Offered By HDFC bank which is Basically Loan against Credit Card. Means if you have HDFC Credit Card you will be automatically eligible for Jumbo loan. The Loan amount Depends on your Credit card Limit, So you need to check with the Bank for that or you can check on your Net Banking.

Can credit card be added to google pay?

 Yes,You can add credit Card or debit cards to your list of payment options instead of paying directly from a linked bank account.

Is credit card or atm card are same ?

CREDIT CARDS

With a credit card, you can borrow money to pay for things and pay it back later. The money is borrowed from a credit card company and must be paid back within a certain amount of time. After the billing date, interest is added to the amount that is still owed. All of the credit cards are linked to networks like VISA, MasterCard, Maestro, etc.

ATM CARDS

Usually, a bank is the one that gives these out (incl. banks). As the name suggests, an ATM card can be used at an Automated Teller Machine (ATM) to take money out of an account that is linked to the card. Before, ATM cards could only be used for transactions "on-us." But now that ATM networks can talk to each other, these cards can be used at a wider range of ATMs.

DEBIT CARDS

Debit Cards are linked to specific savings or checking accounts, just like ATM cards. With these cards, you can pay for things with the money in your linked account. Like a credit card, they let you buy things at any POS or online store and come with a PIN for extra safety. Debit cards are also connected to networks like VISA, MasterCard, Maestro, RuPay, etc.

ATM cards vs. credit cards or debit cards

A customer can only use an ATM card to take money out of an ATM. A credit or debit card, on the other hand, can be used to pay online and at point-of-sale (POS). A person with a debit or credit card can do all of his shopping with his card, so he doesn't have to carry cash around.

Can credit card be used to transfer money ?

Though credit cards are usually used as a mode of payment for transactions, you can also carry out a credit card to bank transfer. But you can't go straight from your credit card to your bank account. First, you will need to use your credit card to add money to your mobile wallet app.

Steps to transfer money from your credit card to your bank account

Before you move money from a credit card to a mobile wallet and then to a bank account, keep these things in mind:

Some wallets charge up to 3 percent for each transaction.
The money could be in your bank account in one to five business days.
During this process, you may have to pay a higher interest rate than you normally would on your credit card.

How to transfer money from credit cards?

With money transfer credit cards, you can send the money straight to your bank account. Some cards have low or no interest rates for a certain amount of time.

Some credit cards let you get cash from an ATM without paying any interest. But if you pay off the amount on your Bajaj Finserv RBL Bank SuperCard within 50 days, you won't have to pay any interest.

How credit card limit increase ?

What is Credit Card limit?

The Credit Card limit is the usage restriction set by the card's issuer. It's the most you can spend using a Credit Card. If your bank or Credit Card firm sets a limit of Rs 50,000, you can't spend more than that. The credit limit varies based on card type and eligibility.
How to raise credit card limit?

Boost Your Credit Score

Because your credit limit is based on your credit score, you must be cautious. Increasing Credit Card Limit is easy. The credit score is your credit card performance assessment and determines your creditworthiness. It's easier to receive a greater credit limit if you've never missed a payment. So, use the Credit Card to improve your credit score first. You can use the card to pay bills and inform the credit bureau that you need a greater limit.

Repay dues on time

To get the credit bureau to raise your credit limit, you must first pay off your debts. Clear any pending dues from the previous month first. Next, pay future invoices in full before they're due. By making timely payments, you may show your Credit Card provider that can handle debt responsibly.

Be careful about the Credit Utilisation Ratio

Credit Utilization Ratio measures how much of your available credit you're using. Keep this ratio around 30%, say experts. This doubles your Credit Card limit. Low credit utilisation ratio tells the credit card company you don't use it much to manage your costs. Second, it is second only to credit payback history in determining credit score. Low credit use will increase your credit score and credit limit.

Show proof of increase in income

The credit limit is determined by the applicant's earning potential and capacity to pay on time. The credit firm will extend your credit limit if you provide documentation of a wage rise or another source of income.

Reduce the financial obligations you have

When you ask for a credit card limit increase, the banks or credit card companies will definitely consider your debt. EMIs, credit card bills, personal loans, etc. If you have too many obligations, reduce them and eliminate monthly fixed dues before requesting a credit limit increase.

What is the relation Between credit card and cibil score ?

A CIBIL score between 700 and 750 is usually good enough for a bank to give a person a credit card. This depends on the applicant meeting all the other requirements for eligibility.

How much credit card limit should i use ?

Credit experts say that you should use less than 30 percent of all the credit you have. A low credit-to-debt ratio usually means that you are good at managing your money and that you are a responsible person who is not likely to go on a spending spree.

Above I have tried to Solve all your Questions about Credit Cards.

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