Credit cards, which is considered a modern type of plastic money, come with a purchase concept now, you pay later. to be used for various personal reasons. The credit card issuing bank offers a specific amount as credit or loan, and cardholders can pay for their goods or utilities with this credited amount. Customers can use this amount of credit for their needs and repay the amount lent to banks before the next scheduled lump sum or EMI billing. Banks give these cards to customers with specific eligibility and documentation, and the customer must pay a specific interest rate for the amount borrowed. The credit card issuer also provides a specific limit on the amount that can be spent using the credit card, and the cardholder can only use the card within that limit. All credit card issuers offer the facility to use credit card worldwide. Banks offer different types of credit cards to customers with different profiles for different purposes. Carrying a credit card is often preferred nowadays instead of carrying cash or using a debit card because it allows spending over your cash limit.

What are the features of a Credit Card ?
  • You can use a credit card internationally for your spending & purchases.
  • You can choose to pay EMIs for your credit card bill as you pay EMI of any other loan. An interest is charged when you decide to pay the bills in EMIs.
  • You can use your credit card to pay your utility bills online.
  • You get updates and notifications SMS and e-mail from bank whenever 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.
  • Banks protect you from fraudulent transections as they provide lost card liability coverage to the credit cards in case if you lose your credit card or if it gets stolen. But this happens only if you report the missing card.
  • Many credit cards comes with a feature where 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 DOs & DONTs of using a Credit Card ?

Do not exceed your credit limit

Banks offer the credit cards to their customers with a specific limit of credit and a card holder can use the card for a limited amount of funds. This limit is decided on the basis of type of card and the eligibility criteria of the card holder. If you exceed the given credit limit and spend more money, you'll have to pay extra interest rate or fees for doing so. So credit card holders are always suggested to watch their limit of spending.

Complete the payments with your signature

To make a payment in person, credit card holder has to swipe their cards on the machines available at various check out or payment counters. The side, on which the magnetic strip is placed, is swiped swiftly. Traditionally after the swipe, the cashier gives two receipts to the card holder to sign: one belongs to the card holder and other to the shopkeeper. The card holder has to sign both copies in order to complete the transaction. Though now a days credit cards comes with a sensing chip that allows the touch and pay option without any swipe or paper receipt, still it is highly recommended that the card holder should clearly verify the amount payable using the credit card.

You should use a valid PIN or OTP option

To make a payment successfully, card holder have to enter a PIN number while doing the transaction. Many credit cards do not require a PIN for transactions. Whereas some offer to use OTP along with or instead of the PIN. It's always secure to opt for PIN or OTP.

What are the Eligibility Criteria to get a Credit Card ?

  • These are the generic eligibility criteria to avail a Credit card:
  • You have to be an Indian citizen.
  • 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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