Before you buy a Credit Card
- dinesh raj,Ambala
Compare And Apply For Credit Cards
Credit Cards have manifested itself into the necessity of modern age. The plastic money at hand is not only a safest way to carry money but also proves essential when you need a quick buck, which is not there in your bank account. Free credit is something that is being publicized by various credit companies and backs the popularity of credit cards in India.
How To Apply For Credit Cards Online
Gone are those days, when applying for credit cards require lots of paperwork. In today's digitalized world, it is easy to acquire credit card via online. As the card market is witnessing a massive growth , applying online for credit card can save both your effort and energy. For this, you have to choose a right option from a long list of available credit cards in India. Every day, companies are introducing tailor-made offers all you need to do is to study these varied charges before zeroing on a particular card. Compare online credit cards interest rates and select banks like ABN Amro, Citi Bank, ICICI Bank, Standard Chartered, HSBC, Union Bank of India, HDFC, Canara Bank, etc. Our repository of content will make the job easy for you, by including reviews, articles, tips, FAQs, news, glossary, etc.
Credit Card EMI
EMI means a fixed sum of payment made by borrower to a lender every month to payoff both principal amount and interest. It means whenever a person uses a credit card for any hefty purchase then a bank will break up the total value in installments, which is required to be paid at the end of every month. The availability of easy EMI program for consumers will make credit card usage easy and hassle-free. To fasten the process of selecting best credit card, we have recommended top credit card providers like SBI, Kotak Mahindra, HDFC, ICICI, Citibank, Axis Bank on the basis of varied factors.
Credit Card FAQs
What is a Credit Card?
A Credit Card is a plastic card that makes payments convenient. With it, you have the option of making purchases or withdrawing cash when you want, and repaying the amount over a period of time.
What are the eligibility conditions for a Credit Card?
The credit card eligibility varies from the type of card you applied for. In general the basic eligibility includes minimum income criteria for both individuals and company/Firm.
Apart from it, if card is applied on Company/Firm a/c, latest balance sheet, Profit & loss a/c., Board resolution is required. If card is applied on personal a/c, latest Salary slip / Form 16 or IT return copy may be required. Photograph of applicant/s and address proof is a must.
What are the interest rates charged by Credit Card?
Normally, the credit card interest rate charged by the banks varies between 2% to 3% per month.
What is the best way to select the cheapest Credit Card?
Before you choose a Credit Card, get the answers to a few key questions. The answers to most of these questions can be found in the disclosure included with the Credit Card application.
- What kind of card is it?
There are many different types of Credit Cards to choose from. Understand what kind of card you're applying for before filling out the application. This will help you make sure you're applying for the right card.
- How are you going to use the Credit Card?
Do you plan to pay your balance in full each month? If so, a charge card might be the best option. Will you be using your card for balance transfers? You should look for a card with a low interest rate on balance transfers. Do you plan to carry a balance from one month to the next? A Credit Card with a low interest rate is ideal.
- What's the annual percentage rate?
The annual percentage rate, or APR, is the percentage applied to balances that you carry beyond the grace period. The higher the APR, the higher your finance charge will be when you have a revolving balance. Most Credit Cards have a different APR for purchases, balance transfers, and cash advances. Make sure you know the APR for each.
- How long is the grace period?
The grace period is the amount of time you have to pay your balance in full before a finance charge is added. The period is usually expressed in days from the billing date, i.e. "28 days from the billing date." Longer grace periods are better because they give you more time to pay your bill without incurring a cost for the convenience of using credit. If you already have a balance on the Credit Card, new purchases may not have a grace period.
- What are the fees?
You should know the amount of any credit card fees and the circumstances under which the fees are applied. The most common types of fees include: annual fee, late fee, and over-the-limit fee. You may also be assessed fees for paying your account over the phone, requesting additional copies of your statement, or for having your check returned.
- How is the finance charge calculated?
The Credit Card company's method of calculating the finance charge has an impact on the amount of the charge. Some methods consider only the current month's balance while others consider the current and previous months' balances. New purchases may or may not be included in the calculation. Common methods of calculating your finance charge include the average daily balance and double billing cycle method. Of these two, the average daily balance method is the least expensive.
- What is the credit limit?
The credit limit influences your purchasing power. If you're new to credit, it's wise to start out with a low credit limit to become familiar with responsible Credit Card habits. Some financial situations allow a higher credit limit. Be wary of no-limit Credit Cards because they can sometimes look maxed out on your credit report. This can have a negative effect on your credit score.
- What are the rewards?
Some Credit Cards offer rewards for using your Credit Card. Make sure you fully understand the reward structure and the amount of purchases you have to make to receive the reward.
- What kind of card is it?
What is a MasterCard or a Visa card?
MasterCard and VISA are both international payment systems who franchise member banks to issue cards with their brand name and provide settlement service for card payments to their franchisees globally.
What are the documents required for obtaining a Credit Card?
If card is applied on Company/Firm a/c, latest balance sheet, Profit & loss a/c., Board resolution is required. If card is applied on personal a/c, latest Salary slip / Form 16 or IT return copy may be required. Photograph of applicant/s and address proof is a must.
What is grace period of a Credit Card?
It is a period of time during which you are allowed to pay your Credit Card bill without being charged a finance and/or late fee. This period is usually 18-55 days.
What is the mode of payment for Credit Card borrowings?
There are many easy ways to pay your monthly Credit Card bill such as:
- Through ATMs
In case you have saving or current account in the same bank, you can just walk in to the ATM machine, at any time and transfer the bill amount from your savings or current account to your Credit Card account.
- Through Net Banking
In case you have saving or current account in the same bank, you can transfer the card bill amount from your savings or current account to the card account online.
- Standing Instructions
If you have an account with the same bank, you can instruct them in writing to automatically debit your bank account with either the minimum amount due or total amount due of your monthly outstanding on your Credit Card. Your account with the Bank should be a sole account or a joint account with an 'any' or 'either' signing mandate.
- National Electronic Funds Transfer (NEFT)
You can transfer funds from any other bank account to make your card payments. Credit will be reflected within 1 working day.
- Drop-box option
You can also drop a local cheque, payable to your 16-digit card number, at any one of the drop boxes located in ATMs and branches of the concerned bank in your city.
- Over the counter
You can also walk into any Bank branch and pay by cash.
- Through ATMs
What are the types of Credit Cards available?
Since each consumer's financial needs are different, it makes sense that there are different types of Credit Cards. Before you apply for a Credit Card, become familiar with the various kinds of Credit Cards to make sure you're choosing the best Credit Card for you.
- Standard Credit Cards:
The most common type of Credit Card allows you to have a revolving balance up to a certain credit limit. Credit is used up when you make a purchase and made available again once you've made a payment. A finance charge is applied to outstanding balances at the end of each month. Credit Cards have a minimum payment that must be paid by a certain due date to avoid late-payment penalties.
- Premium Credit Cards:
These cards offer incentives and benefits beyond that of a regular Credit Card. Examples of premium Credit Cards are Gold Credit Card and Platinum Credit Cards that offer cash back, reward points, travel upgrades, and other rewards to cardholders. Premium cards can have higher fees and usually have minimum income and credit score requirements.
Both standard Credit Cards and premium Credit Cards have specific types of Credit Cards. Student Credit Cards, zero percent interest cards, and travel cards are just a few types available.
- Charge Cards:
Charge cards do not have a credit limit. The balance on a charge card must be paid in full at the end of each month. Charge cards typically do not have a finance charge or minimum payment since the balance is to be paid in full. Late payments are subject to a fee, charge restrictions, or card cancellation depending on your card agreement.
- Limited Purpose Cards:
Limited purpose Credit Cards can only be used at specific locations. Limited purpose cards are used like Credit Cards with a minimum payment and finance charge. Store Credit Cards and gas Credit Cards are examples of limited purpose Credit Cards.
- Secured Credit Cards:
Secured Credit Cards are an option for those without a credit history or those with blemished credit. Secured cards require a security deposit to be placed on the card. The credit limit on a secured Credit Card is equal to the amount of the deposit made. Secured Credit Cards have revolving balances depending on the purchases and payments made.
- Prepaid Credit Cards:
Prepaid Credit Cards require the cardholder to load money onto the card before the card can be used. Purchases are withdrawn from the card's balance. The credit limit does not renew until more money is loaded onto the card. Prepaid cards do not have finance charges or minimum payments since the balance is withdrawn from the deposit. Prepaid cards are similar to debit cards, but are not tied to a checking account.
- Business Credit Cards
Business Credit Cards are designed specifically for business use. They provide business owners with an easy method of keeping business and personal transactions separate. There are standard business credit and charge cards available.
- Standard Credit Cards:
What is a Credit Limit?
Credit limit is the maximum amount you could spend / borrow using your Credit Card. This limit is determined by various personal details like your income, source of income etc. The credit limit is normally revised upwards or downwards based on your previous year's track record in terms of spending and repayment.