A Credit Card, as its name suggests, gives you credit, for a charge, of course, and allows you to pay for service or product over a period of time. The days of credit one gets could range from 20 to 50 days (calculated from the day of billing and not from date of purchase) come interest free. You can choose to pay your dues entirely at one go or stagger them after paying the minimum amount due every month.
Credit Card companies/ issuing banks do have a minimum income level requirement which serve as the preliminary point while apply for credit card. The income requirement varies from bank to bank, ranging between Rs.60, 000 to Rs.2 lac per annum, depending upon your choice on the type of card you want and also upon your risk profile. You have to be at least 21 years of age and not more than 65 years.
In India, there are essentially three types of cards available, Visa, Master Card and Amex (American Express). These Cards have been popular in India and have an almost equal market share.
It is sensible to pay off at least the minimum amount due on out-standings every month. Interest will be charged if you do not pay back the Total Amount Due of the previous month statement by the payment due date. Interest will be charged on the Total Amount Due and on all new transactions till such time as the previous outstanding amounts are paid in full. Also, interest will be levied on all cash advances from the date of the transaction until the date of settlement. The Minimum Amount Due shall be 5% of the outstanding amount. Installment amount due on the Card will be added to the Minimum Amount Due.
With a Credit Card, you can delay payment of the bill by up to 50 days. Also, most card issuers give you a discount on the next year's annual fees if you make purchases over a certain specified amount on your card.
If you lose the PIN get in touch with the bank ASAP. The bank will replace your credit card and issue a new PIN. This replacement process comes at a cost and gets billed in your next statement.
Insurance are now a standard feature for Credit Cards, both personal and on the articles purchased on the credit card. The insurance cover provided is basically determined by the type of Credit Card owned, like depending on if it is Gold, Silver or Executive. Gold cards naturally carry the highest insurance cover for its members. Among the other types of insurance provided by the card companies are:
a) Personal accident insurance: This covers air/road accidents etc. The amount insured again differs across the categories and varies from banks to banks.
b) Baggage Cover: This provides cover against the loss of one's baggage while travelling. This feature is available on Gold Cards and International Credit Cards and frequent travellers may find this feature useful.
c) Air Accident Insurance: Every Credit Card holder is insured for a certain amount of money, which is paid upon the death of the individual while travelling by air. The insurance cover varies between bank to bank and upon the type of card owned.
Every Credit Card holder is insured for a certain sum of money, which is paid upon the death of the individual. The insurance cover varies from bank to bank and depends upon the type of card owned. The card holder is insured a certain amount against different life insurance covers depending on the category of the card owned.
The concept of Credit Card Rewards Points was introduced by Credit Card companies to promote regular usage of their cards by its members. This concept basically rewards you with points for the amount spent on purchase or services through your card. These points can then be redeemed for gifts or for select product purchases.
Purchase protection feature of Credit Card means all items bought from the card are automatically insured from damages or loss due to theft/fire, up to a certain amount.
Never treat your card carelessly and always keep it safely in your wallet. Never leave your cards unsigned or disclose your card number. Check your name on the card, note down the card number and sign below the magnetic strip. Always keep the copy of signed charge slips when you spend on your card. This will help you tally what you spent with what you get billed for.
Cash advance (withdrawal) fees are payable when you withdraw cash from an automatic teller machine using your Credit Card. Cash advance facility should be used only when it is extremely necessary. The interest rate is very high, usually around 36% to 38%. Cash advance fees are chargeable on a daily basis and at about 2.5% per transaction of fixed at a minimum of Rs.50 or 100; it is wise not to use this facility if you can manage otherwise.
In case, you lose or your card is stolen, inform the bank immediately. The bank will then immediately deactivate your card to prevent any fraud. After you report the loss, your liability is restricted to Rs.1, 000. You may also have to pay for the reporting of the loss in the lost card list. Besides this, you will be expected to pay for the issue of a replacement card.
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