What is a Credit Card and how credit card works?
A credit card is a specially designed payment card for online as well as offline financial transactions that allow its users to borrow funds at a 0% interest rate for a certain period. To cater to the different segments of customers there are various types of credit cards present in the market with various offers. To fulfill the required eligibility for credit card one has to have a good CIBIL score and other criteria such as credit history, income, and other criteria set by the respective financial institution.
Generally, a higher CIBIL score and better history help to get a higher credit limit and better offerings. Though the card offers interest-free funds for financial transactions, most of the cards charge heavily on the credit card cash withdrawal from the ATM and nonpayment of the due amount within the specified time.
How to use credit card wisely?
Credit cards are very easy to use, you can use your credit card to make payments both offline and online. But to earn benefits out of your card, you need to know how to use a credit card wisely? With smart and controlled use, it can prove to be a very helpful financial tool that can help you to bag big benefits, and also it can create a good impact on your CIBIL score. On the other hand, it can easily cause a huge financial disaster if used irresponsibly. There are some tips given below that can help you to get the best out of your card.
- Pay your total due balance in time:
A credit card interest rate is the highest interest rate among all, so try to avoid it, by paying the bills completely on time. Also, try to keep your monthly spending to a limit that you can afford very easily. It will help you to enjoy the benefits of credit card without paying interest. Always try to pay your bills in full, if there is an emergency try to pay at least the minimum amount due in credit card bill within the due date and clear off the remaining balance as soon as possible.
- Try to avoid using credit cards for daily needs:
Never use your credit card to pay for your daily needs, only use it when there is no other option. Use it as a short term loan and pay it back as soon as possible.
- Never use your complete credit limit:
Try to keep your credit card balance under 30% of your credit card limit or at least try to keep it below 50% if there is an emergency. The percentage of the total credit limit that you are using is called the utilization ratio. A lower utilization ratio can keep your CIBIL score healthy.
- Choose a card according to your needs:
If you want to use your credit card for your daily needs then try to use a card that offers reward points on spends. So that you can at least earn something from what you spend. For instance, you can go for citi rewards credit card or icici coral credit card both cards offer excellent reward benefits.
- Never use your credit card for cash withdrawals:
Cash withdrawal is different from the normal spends you make with a credit card, when you withdraw cash from your credit card, you have to pay credit card cash withdrawal charges for the amount you have withdrawn, plus you have to pay interest for the withdrawal amount from the first day. And all these make a cash withdrawal from credit card very expensive.
How does a credit card work?
With a credit card, you can borrow money from the card provider against your credit card limit, and you are liable to return the money within the due date. When you use your card for payments both offline and online, the information of your card is sent to the merchant’s bank, the credit card network then verifies your details and if everything is alright, they approve the transaction.
Once your transaction is approved the amount you want to pay will be deducted from your available credit limit, and at the end of your credit card billing cycle, you will receive a statement from your card provider with a detailed description of your spending along with the total due amount, your credit card minimum due amount and your due date. When you pay back your dues, the paid amount will be added to your credit limit again. You can pay the bill amount completely or partially within the due date. But if you have some unpaid dues, no matter whether you have paid the minimum due or not, the card provider will start counting the credit card interest rate on your unpaid due amount.
Credit card companies earn their benefits from merchant fees, delayed payment fees, and other credit card charges you pay. But the finance charges in credit card is the main source of their benefit. It is the highest rate of interest, and you can avoid it just by paying your bills on time.
Which is better credit card or debit card?
Credit cards and debit cards seemed to be identical, normally both need a card network to facilitate their transactions and both can be used to make payments online and offline. But there are some major differences between them.
The main difference is that when you use a debit credit card for payment the payable amount is directly drawn from your checking account, but with a credit card, the payable amount will be charged to the cardholder’s line of credit, for that the cardholder will get a bill on his or her billing date. With a debit card the cardholder’s account may be connected to an overdraft line of credit, to cover the customer against overspending, whereas with a credit card, the cardholder has his or her credit limit, the cardholder can spend beyond his or her credit limit but it would be very costly.
- Debit card: A debit card is a payment card for online and offline transactions, debit cards are issued by banks to their customers with very low or zero fees. With a debit card, cardholders can withdraw cash from their accounts, conveniently without any paperwork. A debit card is linked to the cardholder’s savings account and you can also withdraw cash from ATMs without any charges.
When you pay using your debit card, the bank keeps a hold on the payable amount and within 24 hours it will be transferred from your account to the merchant’s account. There is also a debit card called the prepaid debit card, with such cards you have to load the amount you want to pay onto the card, these cards do not have any linked bank account with them and you can use it like a regular debit card. Anyone with a bank account and a decent deposit in it can get a debit card.
- Credit card: credit card is also a payment card, but in contrast to debit cards it does not have any checking account linked with them, depending on the card holder’s creditworthiness, the card providers offer their customers a credit limit against which they can spend with their credit card. Whenever you make a payment with your credit card, the payable amount will be added to the outstanding amount.
At the end of your credit card billing cycle, you will get the bill and within the due date, you can pay the bill completely or partially. But if you carry an outstanding balance you will have to pay the interest for your dues.
Normally credit cards are not available for all, only an applicant with a decent income, good CIBIL score, and other required eligibility can apply for a credit card. Although some card providers offer credit card on fd (fixed deposit), and you can get them without any CIBIL score and fixed monthly income.
How many types of credit card are there?
To serve the demands of people, credit card companies have issued different types of credit card. Every credit card has its own merits and demerits, and a single credit card cannot be beneficial for all. Therefore, before applying for a credit card, one should know the types of credit cards and choose the type that suits his/her needs.
- Cash back credit card: With these cards, you can earn instant cashback from your spending. Cashback is the best form of benefit, as it does not need any redemption. If you want a low-cost credit card that can earn you handsome cashback benefits, then the hsbc cashback credit card will be a good option for you.
- Lifestyle credit card: These cards enhance the lifestyle of the cardholders, the benefits of these cards focus on – Shopping, Dining, movies, Food order, etc. also you can get special discounts on some selected brands.
- Shopping Credit card: this type of card is best for those who shop a lot, you can get benefits on both online and offline shopping, in form of a Cash-Back or reward. For example, rbl shoprite credit card and axis bank flipkart credit card are some of the best credit card for online shopping.
- Travel credit card: If you travel a lot then these cards will be beneficial for you, with this type of card you can earn a big discount on tickets or hotel bookings, also you can earn air miles from your purchases, which you can use for flight ticket bookings. If you want a travel credit card for yourself, then you can go for icici makemytrip credit card or you can check our top 10 travel credit card page.
- Reward Credit card: You can earn reward points from your purchases with these cards, these cards are best for frequent uses. If you want to earn reward points, then you can choose the citi rewards credit card or you can check our top 10 reward card page to find out the best reward credit card for yourself.
- fuel credit card: These cards are best suited for fuel purchases, you can earn benefits like discounts on fuel surcharge, cashback on fuel purchase, reward points, etc. These cards often have a partnership with some companies, and you can earn the benefits only when you purchase from them, so read the terms and conditions thoroughly before applying. If you want a low-cost fuel credit card then sbi bpcl credit card will be the best fuel credit card for you.
- Entertainment Card: If you spend a big amount monthly on entertainment, then this type of card will be best for you. These cards come with big benefits on entertainment including – free movie tickets, dining benefits, shopping vouchers, etc. Some of the entertainment credit cards available in India are standard chartered manhattan platinum credit card, axis my zone credit card.
- Credit card for lounge access: If you want to enjoy free access to premium airport lounges then a lounge access credit card will be a good option for you. these cards are designed to offer free lounge access and other travel benefits.
- Free credit card: These credit cards are free from joining and annual fees, but other charges like finance charges, late payment penalties, etc. are applied. If you can use it properly, it can be very beneficial. You can visit our top 10 free credit cards page to find out the best lifetime free credit card for yourself.
- Premium credit cards: These cards are designed for premium customers with premium benefits. These credit cards are issued against high annual income and excellent credit scores. american express smart earn credit card, indusind bank platinum aura credit card, sbi elite credit card are some of the premium credit cards available in India.
- business credit card: If you have a business or a company then a business credit card or corporate credit card will be perfect for you, it comes with a higher credit limit and helps you run your company much smoother.
- Credit card for first-time applicants: These credit cards are best for those who are getting a credit card for the first time, those who have a low or zero credit score. These types of credit cards come with regular credit card benefits at a low cost.
- Secured credit card: These cards are issued against Fixed deposit or term deposit account, and they are best for building a credit score, also for those customers who have a low annual income an fd based credit card will be a good option as you can get such a credit card without income proof.
- credit card for low income: These cards are best for those who have a low monthly income, these cards come with a lower credit score, and low annual and renewal fees.
How to apply for a credit card?
Nowadays if you have the eligibility, it is very easy to get a credit card, you can apply for a credit card both offline and online. Now, most of the banks have digitized their application process to make it convenient and easier for the applicants.
- Online method: applying online is the best way to get a credit card.
Step 1: Explore the available credit cards within your budget and compare them according to their offers and benefits.
Step 2: Make a selection according to your needs and uses.
Step 3: Apply for your selected card by submitting some details like – Name, Contact number, Email Id, Income, etc.
Step 4: a representative will call you to complete the process and you will get complete guidance from him/her through the application process.
Step 5: Within a few days, a representative will collect all the documents from your doorsteps.
- Offline method: if you are not comfortable with the online application, then you can also apply for your desired credit offline by visiting the card issuer.
Step 1: Visit your card issuer and consult with the representative about the type of card you want. The representative will then offer you some cards according to your needs and use.
Step 2: You have to submit some documents including proof of income, Id proof, etc. along with an application form and 2 passport size photographs.
But before applying for a credit card determine, what will be the uses of the card, your budget, your spending habits, what kind of card will be most useful for you, and then choose a credit card that fits with your spending patterns and lifestyle.
If you want to apply for sbi premium credit card then visit our SBI credit card FAQs page to get more detailed instructions. You can also find the answers to some SBI credit card-related questions like how to add credit card beneficiary in sbi credit card account? etc.
How to choose the right credit card?
Nowadays there are several types of credit cards available in the market, so it can be challenging for you to decide which credit card is best for you. There are some steps given below that can help you to pick out the best credit card for yourself.
- Choose according to your need
The first and the most important step for choosing a credit card is to decide which credit card type is best for you, this step is important because there are so many cards out there and a card can never be beneficial for all.
- Find out the most featured cards
In the next step, you have to find out the cards, from your chosen category, with the most useful features. For instance, if you are looking for a reward card then you should look for a card that offers more reward points on daily expenses, if you want to improve your credit score then you should choose a zero annual fee credit card for yourself.
- Compare credit cards
Finally, you have to select the top credit cards from the options you have chosen then you have to compare them according to their benefits.
- Apply for the card you have chosen
By comparing the best options you can find out which credit card is best for you. Once you have decided which credit card to get, just go and apply for the card.
What is a loan against a credit card?
The loan against credit card is a feature that enables credit cardholders to get a small loan against their available credit limit. It is much like a personal loan, and if you have a credit card you can easily get it, but unlike a personal loan, you don’t need to submit any kind of documentation to show your eligibility.
You can get a personal loan on credit card limit almost instantly, without any paperwork. You can apply just by visiting your card provider’s official website or from your net banking or mobile banking account. There is an option for offline applications too.
There is a huge misconception that the card provider increases your credit limit while issuing the credit card loan to keep your credit limit intact, but this is not the case, the loan on credit card is credited against your available credit limit, and you have to pay it back in monthly installments. These types of loans are the best options to deal with urgent situations, and they are cheaper than cash withdrawal from credit card, and once the loan gets approved the amount will be credited almost instantly to your bank account or you can get it as a demand draft too.
You can pay off your loan on credit card very easily with monthly installments, normally the installment will be a part of your monthly credit card bill and you must pay it back within the due date
The charges applied on such loans are a little higher than the other interest charges. The interest rate varies depending on your credit history, CIBIL score, credit card type, etc. the credit card loan interest rate starts from 15% and goes up to 20% or more. So if there is some urgent need for cash and you are confident of paying it back within a year then you can apply for this.
How to track credit card application status?
Checking the status of your credit card application is very simple, there are multiple options to check your application status.
- Online process: When you apply for a credit card the card provider will send you a message on successful application with your application number and reference number. With those numbers you can check your application status, just visit your card provider’s official website and submit those numbers and other necessary details to see the status of your application. You can also use your registered mobile number to track your application, visit your card provider’s official website and submit your mobile number, you will get an OTP and after verifying the mobile number you can view the status of your application.
- Through air-way bill number: there is another option available, on the approval of the application, the card provider will send you a letter with a unique airway bill number. With that number, you can check your application status too. just visit the credit card section of your card provider’s official website and select the track application, now you will be redirected to another page where you can track your application just by entering the air-way bill number.
- Offline process: If you feel uncomfortable with the online process, then you can check your status offline. You can either call the customer service or you can directly go to the bank with your application number, reference number, and date of birth, you will get instant help from the executives.
If you want to check your axis bank credit card application status then visit our Axis Bank credit card FAQ’s page, you can find more detailed instructions there.
How to pay credit card bills or how credit card bills are paid?
Paying a credit card bill is very easy, there are many ways both offline and online, to pay your credit card bill, of them, the online method is the most popular and widely used, it includes Bank transfer and some credit card payment app like Paytm, Amazon pay, Cred, etc. also you can choose to pay your bills through offline by visiting the branch.
- Bank transfer: Paying credit card bills through bank transfer is a commonly used method, it provides instant transfer, and you can access the facility from ATMs, Net Banking, and Mobile banking.
- Payment through Paytm: You can also pay your credit card bills through Paytm, this feature is applicable on a wide range of credit cards including Visa, MasterCard, Diners credit card, and American Express. To pay your card bills through Paytm, just visit the credit card payment section on the Paytm app, here you will find the list of your linked credit cards, and after choosing a card among them you can pay the bill
- Pay through Amazon pay: If you are an amazon pay user you can also use the amazon pay app to pay your card bills. The process is very simple, just go to the credit card bill section, select your desired credit card and pay your card bill conveniently.
- Cred payment app: Cred is a new and beneficial way to pay your credit card bill, not only it is convenient but it can earn rewards from your bill, whenever you pay your card bills through cred, you will get cred points, you can use those points to get a discount on your bills, or you can use those points to get discount on – Swiggy, Skillmatics, Flipkart, Nykaa, Urbanclap, etc. Also if you save your card on cred you will get reminders regarding your due date.
- In Branch payment: If you are uncomfortable with the online method, then you can just visit the respective branch, and pay the bill amount just by filling a deposit form and submitting it at the counter, the payment will be done within a working day.
How to check my credit card statement online or how often are credit card statements issued?
A credit card statement is a very vital document that provides much important information about a credit card. Credit card statements are generated at the end of the billing cycle and it contains information about every single transaction you have made with your card, it also provides several other information like – Account summary, applied charges, offers tailored for the customer, Earned reward points, outstanding balances, and some important terms and conditions and lots more.
Naturally, at the end of a credit card billing cycle, the card provider will send you the bill/statement to your registered email, but if you have not got your statement in an email, then you can visit your card provider’s net banking portal, here you will find your current statement. Also, your card provider will notify you about bill generation with an SMS.
If you want a hard copy of your card statement, then you can request your card provider for a physical copy just by calling the customer service authority or visiting your nearest branch.
If you want to download your icici bank credit card statement then visit our ICICI Bank FAQ’s page, we have discussed the complete process there.
Sometimes credit card providers encrypt credit card statements with passwords, to keep the information of the cardholders safe. For instance, if you want to open an Axis Bank credit card statement, you need to provide a unique axis bank credit card statement password. If you want to know more about how the password system works visit our Axis Bank credit card FAQ page.
What is credit card PIN generation or how to generate credit card pin?
Credit card PIN is a unique four-digit number system, designed to enhance the security of card transactions especially when the card is used in ATMs and ar poa machines. When you enter your PIN to perform a credit card transaction, the system matches your PIN with your Id number before authorizing the transaction. Therefore PIN is an important part of a credit card, and PIN generation is the first step before starting to use a credit card.
Nowadays most banks send their credit cards inactive status, but before using it for a transaction, you have to set a PIN for your card, there are two ways to set your credit card PIN –
- How to set credit card pin at ATMs?
You can set your PIN very easily at your nearby ATM, you should follow a few steps–
Step 1: Insert your card and choose your preferred language.
Step 2: You will get an option to set your PIN,
Step 3: Once you select the Set PIN option you will get an OTP on your registered mobile.
Step 4: After entering the OTP, you can select a four-digit unique PIN.
Step 5: Re-enter the same PIN and select submit.
Step 6: You will get an SMS from your card provider on successful PIN generation.
- How to get credit card pin through Net Banking?
If you have a Net banking option, you can set your PIN even more easily from your home. Just log on to your Net Banking account and follow these steps –
Step 1: After logging in to your net banking account, go to the credit card section.
Step 2: Here you will find the Change PIN option.
Step 3: Once you select the Change PIN Option, you will get an OTP on your registered mobile number,
Step 4: Enter the OTP and type a 4 digit unique code.
Step 5: Re-Enter the code and select Submit.
Step 6: You will get a notification from the card provider on successful PIN generation.
No matter which method you follow, make sure that your PIN is unique and strong, never set your date of birth or other special dates as your PIN, as it can be guessed easily. Also never share your pin with anyone.
How to increase credit card limit?
The credit limit is a spending limit set by the Card issuer. Depending on your Income, Age, CIBIL score, credit history, your employment status, etc. the card provider decides how much credit card limit you should have. Every cardholder should know how to increase credit card limit? there are many ways to do it –
- Regular use of credit cards
With regular and responsible use of credit cards you can improve your credit limit, if you pay your bills regularly you will be a responsible customer to the card provider and your credit score will increase too.
- Provide your recent income statement
If your income has increased recently then inform your card provider with a new income statement and request to upgrade your credit card and credit limit.
- Try to get a new card
You can also try to apply for a new credit card with a higher credit limit, and if you have a good history with your previous card, it will be easy to get a new one.
- Request your card provider
Send an application to your card provider to increase your credit card limit, you also have to provide a solid reason to support your request.
- Be a responsible cardholder
Maintain regularity in your bill payment, always pay your card bill completely in time, if there is an emergency at least try to pay the minimum amount due in credit card bill within the due date.
- Be patient
This process is very time-consuming, if you keep using your credit for a long time, the card provider will give you a credit card limit increase offer. There are many benefits of having a good credit score, you will find it very helpful while applying for a loan on credit card, or during an emergency also. A higher credit score helps to keep the utilization ratio lower and it is good for your CIBIL score too.
How to use credit card reward points?
Credit card points or Reward points are the points that the card user earns while making payments with their cards. It is a very smart trick of the Card Providers to encourage their customers to spend more. However, the process of redeeming your earned reward points is very simple. There are several ways to redeem your reward points, but the most popular ways are –
- Redeem through shopping voucher
Many credit card providers offer their customers to redeem their reward points against shopping vouchers or gift vouchers, you can use those vouchers at some selected stores, also some card providers allow their customer to use their vouchers for shopping at some selected online retailers.
- Air miles
This benefit can be attractive to frequent travelers, air miles are also a kind of reward point. You can earn those reward points from your purchases, and you can use them for flight booking or get a discount on flight tickets.
- Redeem into cash
The best way to redeem your reward points is to redeem them into cash, also you can get a portion of your payable amount as Cash-Back.
- To make a Donation
Some card providers allow their customers to donate their earned reward points to the card holder’s desired charity fund. Before getting donated, the points will be converted into cash.
- Other options
Some card providers give their customers a catalog of categories like – accessories, footwear, clothing, stationery, eatables, etc. against which they can redeem their reward points. Also, you can use your earned reward points for fuel purchase, special services, hotel bookings, entertainment, to make a purchase at a partner’s store, etc.
It seems that reward points are beneficial, but to get a decent amount of reward points you will have to spend a lot of money every month, therefore don’t run after reward points because it can leave you with a huge bill at the end of the billing cycle.
What is the interest rate on credit card transactions?
Credit card interest is generally known as Annual Interest Rate or finance charges on credit cards, it is a charge or interest that card providers count for lending money to their customers. The interest is charged only when you carry an outstanding amount or when you have taken a cash advance. It is a fixed rate so it never varies from customer to customer. But it can increase periodically.
The credit card interest rate given on credit card statements is given in annual terms, when the card provider applies it on your dues they convert it in a daily term. For instance, if your interest rate is 16% annually then your daily interest rate will be 16÷365 = 0.044%. So, today if you have an outstanding balance of Rs. 600, you will have to pay Rs. 0.26 for that day and on the next day your total outstanding balance would be Rs. 600.26, also if you spend something with your card it will be added to it, and it continues till you pay your outstanding balance in full.
What is the minimum earning required for applying for a Credit Card?
Your annual or monthly income is a part of the required credit card eligibility criteria. A steady and good income increases the chances of approval. However, there are some credit cards that you can get with a low income, analysing the market it can be said that with a minimum monthly income of Rs.15,000 you can get a credit card.
You can also get a credit card against fixed deposit, these types of credit cards are called the secured credit cards. So if you have a lower salary or low credit score, such types of cards will be a good option for you. But with a Secured credit card you will get a lower credit score.
If you are applying for a credit card for the first time then Axis insta easy credit card will be a good option for you. You can also visit our top 10 credit card page to find out the best credit card for yourself.
How to convert credit card bill into emi?
emi on credit card is one of the most popular features of a credit card. It allows you to purchase a product in easy monthly installments. You can convert your purchase into EMI very easily. You can either convert it into EMI at the time of purchase. Also, you can always convert your purchase into EMI through Net banking, just log in to your net banking account and select that particular purchase, and you will get an option to convert it into EMI.
Before granting you the EMI payment facility, the card provider will check your CIBIL score, your repayment habit, the loans you have taken already, etc. EMI works just like a loan, the card providers calculate EMI based on the period you have chosen, credit card emi interest rate, etc. The monthly installment will be added to your card statement.
What is the relation between the Credit Card and CIBIL score?
CIBIL scores are a three-digit number, set by a financial company named TransUnion CIBIL, it shows your nature as a creditor. It ranges between 300 to 900, any credit score above 750 is a good CIBIL score. Credit score comes into play when you apply for a loan or credit card, it helps you to get a big loan amount or a credit card with a higher credit limit. It also plays a major role in determining how much credit card limit you should get. There are some factors that play a major role in determining your credit score.
- Your Payment history: The credit score depends 30% on your payment history. A clear payment history helps you to maintain your credit score, you can keep your payment history clean by paying your card bill completely in time.
- Cardholder’s utilization ratio: Utilization ratio or Credit Utilization ratio, is the ratio between your consumed credit limit and the total credit limit. A higher utilization ratio can affect your credit score, so it is suggested to keep your utilization ratio under 30%.
- Credit age: Credit age is another important factor in determining CIBIL score. An old credit card with a good payment history can improve your CIBIL score.
- Multiple credit card applications: Applying for too many credit cards within a short time can harm your credit score. It is recommended to keep the number of applications as low as possible.
- The number of credit cards you have: Holding Several credit cards can affect your CIBIL score, although there is no specific limit on the number of credit cards that you can own, it is recommended, no to have more than 3 credit cards.
To make sure, your credit cards do not affect your credit score, use them responsibly and try to keep your repayment history clean, question yourself how much credit card limit should i use? Also, never take your credit card as a replacement for your salary, instead take it as a loan with a very high interest rate.
What is the rate of interest on credit card on credit card cash withdrawal?
Cash withdrawal is an additional feature offered by some card providers, with this feature you can withdraw cash against your credit card cash withdrawal limit, as a loan, and after a certain period, you have to pay it back with applicable interests and other charges. The interest rate and other credit card charges may vary from card to card.
Whenever you withdraw cash from credit card you will have to pay a part of your withdrawn amount as a charge, normally it ranges between 2.5% to 3%, you will also have to pay the finance charge for your withdrawn amount.
However, credit limit and credit card cash withdrawal limit are not the same, credit limit is the total amount that you can spend in a month, without getting any penalty, and the withdrawn amount is the maximum amount that you can withdraw with your credit card. A part of your credit limit is your cash withdrawal or cash advance limit.
Cash withdrawal does not affect your credit score directly, since they are not reported separately. But if you fail to pay your credit card bill completely or partly, within the due date, it can create a bad impact on your credit score.
What are the advantages and disadvantages of credit card?
Credit cards are best known for their benefits, but just like other financial tools credit cards also have some disadvantages. With proper and responsible use you can minimize your losses and maximize your benefits. There is a list of Pros and Cons given below, that should help you to weigh the advantages and disadvantages of a credit card.
Credit card advantages :
- Buy Now Pay Later: With a credit, you can shop for your favorite items or pay for essentials, and the card provider will pay for you, and after a certain period you have to pay your spend amount to the card provider. Also if you fail to clear your total due amount within the due date you will have to pay interest for it.
- Offers and benefits: Most of the credit cards come loaded with several offers and benefits like – reward benefits, Cash-Back, gift vouchers, etc. Card providers also offer benefits on movies, golf access, airport lounge access, etc. and this is the reason why credit card is used?
- Power to dispute a transaction: with a credit card you can dispute the credit card transaction that you have already made. You can also file a dispute against a service that you have not got, or if you are not satisfied with the service.
- EMI facility: With the credit card emi facility, you can convert any purchase, made with your credit card, into Easy EMI. This facility is cheaper than other loans. Also, some credit cards offer no cost emi on credit card for some specific products.
- Loan facility: Some credit card companies offer their customers to get an instant personal loan on credit card, without any paperwork. This feature is very helpful when you need instant cash.
- Keeping a record of expenses: With a credit card, you can get a detailed record of your monthly expenses through card statements that you will get at the end of every credit cycle. It will also help you to track your expenses.
Credit card disadvantages :
Apart from the advantages, there are some disadvantages of credit card too.
- Interest charge: credit card charges high interest rates, the credit card rate of interest ranges around 40% annually, this is the highest rate of interest. If you fail to pay your due amount in time or you withdraw cash with your credit card, the card provider will start calculating interest on your dues.
- Charges: Credit cards come with several charges like credit card cash withdrawal charges, credit card annual charges, foreign currency transaction fees, etc. Before applying for a credit card you have to be aware of those charges.
- Surcharges: You may have to pay some extra charges for some categories while paying with your credit card. Such as railway surcharges and fuel surcharge on credit cards. Also, some credit cards offer a waiver on surcharges, with these cards you don’t need to pay those extra charges.
- Overspending: CIBIL score depends on the utilization ratio of your credit card, utilization ratio is the ratio between your total credit limit and your utilized credit limit, a higher utilization ratio creates a bad impact on your credit score. Therefore you should keep your utilization ratio under 30% and if there is an emergency, at least try to keep it below 50%.
- The credit card minimum due payment: Card provides offers their customer to pay a minimum due within due date, but this is not beneficial at all. If you just pay the minimum amount due in credit card bill you will have to pay the finance charge for the rest of the due amount and for all the new credits. It can only save you from late payment penalty
How to get a credit card for the first time without any CIBIL score?
CIBIL score is very important while applying for a credit card, it says your eligibility to get a credit card, depending on your CIBIL score the card provider sets your credit score. But you can get a credit card without a credit score. Some credit cards do not need a credit score, they are
- Secured Credit card: If you have a low credit score or zero credit score, then this card would be perfect for you. To get a credit card on fd(fixed deposit) you have to open a fixed deposit account with your desired card provider. But these cards come with a lower credit limit, from 50% to 100% of your deposit amount. These cards are best for building/improving credit scores. If you want a secured credit card then you can go for icici bank platinum credit card it is a very good credit card for beginners.
- Card against savings account: some major card providers also offer a credit card against a savings account. To avail of such credit cards, you have to create a savings account with the card provider and make a certain deposit in that account.
- Prepaid credit card: Most of the frontline cards offer prepaid credit cards to those customers who have a low or zero CIBIL score. You can get this card against your savings account, it works like a prepaid mobile, first, you have to deposit the amount that you want to pay, and then you can spend the amount with your card. This type of card can also create a good impact on your CIBIL score.
- Add-on credit card: Getting an add on credit card can be an option if you want to get a credit card without any credit score. If you have a family member who has a primary credit card, you can get an add-on card from him/her. Although with an add-on card you will get a lower credit limit, it can help you to build or improve your credit score. Also, you will get all the facilities of primary cards with your add on credit card. If you want to apply for an icici add on credit card then visit our ICICI credit card FAQs page, where the process is discussed in detail.
Can I pay my credit card bill in cash or can credit card bill be paid in cash?
Credit card bills can be paid with a number of options like Net Banking, Paytm, Cred, Amazon pay, etc. But if you are not comfortable with online payments, then you can pay your bills offline by Cheque, Demand draft, or cash, although some Card providers do not allow their customers to pay in cash. To pay your card bill in cash you just have to visit your nearest branch. You will also have to pay the applicable GST with your bill amount.
But if you use a credit card payment app things will become much easier for you. Also, you will be able to bag some exclusive credit card payment offers.
What to do and what not to do with a credit card?
If you are a credit card user then you must know what to do and what not to do with a credit card. There are some dos and Don’ts is given below that can help you to use your credit card properly.
- Always remember your due date:
It is very important for the card user to remember their billing date and due date so that they don’t forget to pay their bills timely. You feel uncomfortable with your current billing date, you can customize it anytime.
You can also choose the auto-pay option, it will pay your bill automatically within the due date, from your registered account.
- Go through your statement:
Credit card statements are lengthy, but every responsible cardholder should read the complete statement. It contains much important information like detailed transaction history, payable charges, interest rate, and some important dates. And if you notice some expense that you have not made or some unexpected charges, you can contact your card provider.
- Pay your bills timely:
credit card users should clear their dues timely. If you do not pay your card bill or just make the credit card minimum payment, within a few months it will create huge financial trouble for you, therefore every cardholder must pay their bills completely within time.
- Make a clear idea about interest rates:
The cheapest way to use a credit card is to use it without interest, and it is only possible if you pay your bills regularly and completely. This way you can get the most out of your credit card.
Some card providers offer their customers an extended period or give the customer a few more days to pay their bills.
- Get a card for needs:
A credit card is a very useful financial tool, but it is useful only when it is used properly. So, apply for a credit card only for your needs.
For example, if you shop a lot then a shopping card will be best for you, and if you travel then you should go for a travel credit card. This is because a single credit card can never be beneficial for everyone.
If you want a travel credit card then icici makemytrip credit card will be a good option for you.
- Never close old accounts:
If you have an old credit card with a good credit history, try to keep it open because one of the parameters of calculating CIBIL score is credit age, and an old credit card with good credit history can make a good impact on your CIBIL score.
- Keep your credit card spending around 10% of your monthly income:
Never spend more than 10% of your annual income on credit card bills. If you can keep your card bills under this threshold, it will be much more controlled and easy for you to pay the bills.
- Make big purchases with a low APR card:
If you have multiple credit cards, then try to make high-value purchases with that card that comes with a lower interest rate, this is because if you have a big credit card due and you take 2 to three billing cycles to clear it off, you will have to pay a lower interest.
- Pay off your previous dues before applying for a loan:
When you apply for a loan the loan provider checks your Debt-to-income-ratio or DTI. It is a ratio of your total debt payment, that you have to pay monthly and your Income, and to be able to get a loan you have to keep this ratio below 40%, therefore it is wiser to pay off your credit card dues before applying for a new loan.
- Remember your card details:
Every credit card user should remember their credit card number, it can prove to be helpful in several situations, you can report your lost or stolen card quickly, also it can be helpful for online shopping, it will make the payment process quick and easy.
- Never keep your payment due:
Credit card companies offer you big benefits and rewards, also they let you borrow money without any interest for a certain time, but if you fail to pay your card bill within due date, they will charge a high interest against your dues, therefore to keep enjoying your benefits, never forget to pay your dues in time.
- Try to pay your card bills completely:
Credit card providers offer their customers to pay a part of the bill amount, it can save you from being enlisted as a defaulter, but you have to pay interest for the rest of the due amount. You should only pay the minimum due amount when there is an emergency, in such cases, you should stop using this credit card until you pay your dues in full with interest,
- Don’t utilize your complete credit limit:
Never exhaust your credit limit completely or spend beyond your credit card limit, it can create a bad effect on your CIBIL score, also you may have to pay a charge to your card provider. It is wiser to use 30% of your Total credit limit if there is some urgency to try to use 50% of your credit limit.
- Never use your card on an unknown website:
Before using your card on a website for payment, make sure the website is genuine, also never use your card on a public computer, and never use public WIFI for online transactions.
What are the charges of a credit card or how much credit card charges?
A credit card is a very helpful financial tool, and proper use of it can earn you unmatched benefits and features. credit cards are not completely free of cost, there are several credit card fees every cardholder must pay. The card user needs to remember that you have to pay monthly or annually.
- Annual or renewal fee: credit card annual fee is a yearly charge, it varies from card to card. Some credit cards come with zero annual fees, they are called zero annual fee cards, but before applying for such a card, make sure it is free for a lifetime not for some years.
- cash advance fee on credit card: Many card providers offer their customers, a part of their credit limit as a cash withdrawal limit, against which one can withdraw cash from his/her credit card. but, this feature is not free of cost, you will have to pay a charge for using this facility, normally you have to pay a percentage of your withdrawal amount as a cash advance charge.
- Finance charge: The finance charge or the credit card interest rate is the highest rate of interest, it is charged when you do not pay your card bill or pay the minimum due amount, finance charges are also applicable on cash withdrawal.
- credit card late payment charges: If you fail to your credit card bill completely you will have to pay the credit card late payment charges along with applicable interest, although, credit card providers offer their customers to pay a minimum due to avoid a late payment penalty.
- Over limit charge: Every credit card comes with its specified credit limit, it says the total amount you can spend with your credit card without getting any penalty. But, if you cross the credit limit, you will be charged for it, the charged amount depends on the amount that you have spent beyond your credit limit.
- GST on credit card transactions: Taxes are applicable on credit card transactions, and in India, GST is applied on the processing fee on EMI, credit card annual fee, and on interests too, at a rate of 18%.
- Foreign currency transaction charge: Credit cards are normally globally accepted, but most of the credit card holder does not know that for using a credit card at any foreign country you have to pay a charge for currency conversion. This charge is known as foreign currency Mark-up.
What is a credit cycle or how to know credit card billing cycle?
The credit cycle is the period between two bill generations, it ranges between 28 to 30 days, and it depends on your card provider and the type of card you are using. All transactions made with your credit card during the credit cycle will be reflected on the statement that you will get at the end of the credit cycle. Any other credit card transaction that you have made after bill generation will be added to your next statement. After the bill generation, you will get 20 to 25 days to pay off your bills. And the last date of bill payment is called the due date. You can find information about your credit card billing cycle, due date or billing date, etc. in your monthly statement, you can also call the customer service of your card provider and ask them for the information.
What is the difference between Visa, MasterCard, Discover, and American Express Credit Card?
Visa, MasterCard, Discover, and American are all Card Networks, whenever you use a credit card they facilitate your credit card transaction, technically there is no difference among them, all four of them are American companies. But they are different from each other according to their acceptance and ability to issue cards.
- Visa – This is one of the most accepted cards in the world, it is accepted in over 200 countries in the world. They do not issue cards.
- MasterCard – Just like Visa this card is also widely accepted. You can use it in over 210 countries in the world at more than 52.9 million merchants worldwide. Like Visa, it also never issues cards.
- Discover – Discover is slightly different from Visa and MasterCard, it is also a bank. And they also issue their cards.
- American Express – Just like Discover American Express can issue cards although, American Express is not a bank, it is a financial company. Their cards are accepted in 130 countries in the world.
Therefore, it is evident that Visa and MasterCard are the most accepted credit cards in the world. American Express and Discover offer credit cards that are only available to some selected applicants, with a big annual income and excellent credit score. If you want to use your credit card only in India, then a rupay credit card will be the best option for you.
What is the Grace Period?
A grace period is an extra time that the card providers offer their customers to pay off their bills. It is the time between the bill generation date and the last date of bill payment, during a grace period you will not be charged any interest, the time may vary depending on the card provider and the card type.
However, if you have a previous unpaid balance in your account, or if you have performed a balance transfer or credit card cash withdrawal, the grace period will not be applicable anymore.
What is credit card insurance and how to use it?
Credit card insurance or balance protection insurance covers the customers during a rough time, it pays off the card bill in case the cardholder is disabled, hospitalized, unemployed, or dead. However, the insurance company is not liable to pay the bills that you have made after the disability takes upon you.
There are various types of credit card insurance, like – accidental insurance, to give you coverage against accidental injury or death. Travel Insurance, to give you coverage against lost baggage during a trip. Credit insurance, to pay off card bills if some disability occurs, or the cardholder dies, and Purchase Protection, to give you coverage against bad delivery and misplaced products.
credit card insurance can give you some extra security, against the disability to pay your card bill, and it can save your CIBIL score from getting badly affected. So if you don’t have enough insurance protecting you from unexpected situations, you can go for credit card insurance.
How to make your card secure?
Nowadays hacks and frauds have become a part of life. Although most credit card providers have updated their system with credit card fraud detection systems, bad things can happen at any time. Therefore, every cardholder needs to know how to make your card more secure. Even if you have not experienced such things till now, it is wise to keep yourself prepared for such situations. Some tips can help you –
- Apply for a replacement card: If a data breach happens to your credit card provider, you should immediately apply your card provider for a replacement card. Normally the card provider will not reject your application.
- Be updated with your account: after applying for a replacement card, keep checking your account regularly for up to 30 days, if you find anything suspicious, claim it as soon as possible.
- Freeze your account: If you are too much worried about the information breach, contact your card provider and ask them to freeze your account temporarily, it can save you from becoming a victim of fraud.
- Change PIN: PIN adds extra security to your transactions, try to set a PIN that is hard to guess and change your card PIN at least after every six months. And keep your PIN and OTP secret.
- Beware of spam calls: Sometimes scammers try to steal your important information, like expiry date, CVV, OTP, etc. by calling you as a representative of your card provider, never provide them such information, card providers will never ask you for such information.
- Use your card only on the safe websites: always make sure the website on which you are using your card, is safe if the link of the website contains HTTPS:// then it is safe. Some websites also contain HTTP://, which is not safe.
If you have never experienced fraud, that does not mean that it can never happen to you, it is wiser to keep your card secured before something bad happens. If you are a fraud victim, then inform your card provider as soon as possible, and wait for the things to be cleared, but keep yourself updated about your account.
How to report a card in case of loss or theft?
Credit cards are among the things that anyone hates to lose, it is not only that lost credit cards create a lot of troubles, but also a lost credit card can hurt you financially if your credit limit on the lost card is very high. Therefore every cardholder should know what to do if something happens to them.
As soon as you realize that your card is lost or stolen, call your card issuer, and inform them about it. you can find your card provider’s customer care number on the card statement,
According to the law, the liability of a cardholder in case of fraud transaction is limited, but if you can report before anyone else uses your card, you can enjoy zero liability.
After reporting your card provider about the loss, be prepared with all your information, because they will verify your identity, and they will review your recent transactions, for fraud transactions.
Once your report is filed, your card provider will block your card, and you will get a new card from your card provider.
After reporting your lost card, send a mail or letter to your card provider describing your account details, when you realized the loss, and when you have reported it.
Keep an eye on your monthly statements at least after 3 months of reporting, if you notice something suspicious, inform your card provider immediately.
If your card is lost or stolen, don’t panic, call your card provider and follow the steps, laws have now limited cardholder’s liability in case of frauds, also some card providers offer their customer zero lost card liability as long as a customer reports within a certain time.
How to file a dispute?
Credit cardholder has the right to file a dispute, even if the transaction is already done, there are three main reasons when a customer can file a dispute – Fraudulent Charges, Bad service, Error of Billing, for frauds, there are no time limits, you can claim whenever you realize it, but in billing and service-related cases, you have to file the dispute within 60 days.
- Fraudulent Charges: If you realize a fraud in your account, you can file a dispute against it just by contacting your card provider, nowadays most credit cards come with a zero fraud liability, which means you will not be liable for any king frauds,
You should also file an FIR for the fraud, it may not help you to win the dispute, but it helps the police and the government agency to track those frauds. Before filing the dispute make sure the fraud transaction happened and it is not a purchase that your family members have made, first try to solve it with the involved merchant or party, then contact the card provider.
- Bad service: If you have paid for something but you have not got the desired service or if you are not satisfied with the provided service, then you can file a dispute against a purchase. But you have to file the complaint within 60 days of the statement generation. But, before reporting the transaction, try to solve the issue with the merchant, and if it does not work, you can go for a dispute. You don’t need to pay the charge for which you have filed the dispute, but you have to pay the rest of the bill in time.
- Against an error of billing: If you see some error in your card statement, you should inform your card provider with a letter, or email, within 60 days. Normally these kinds of disputes are solved easily and you will get a reply from the care provider within 10 days, but in the end, if you are not satisfied with the result, you can take your complaint to the credit bureaus within 10 days.
During the process you don’t need to pay the charge for which the dispute is filed, you can just call your card provider and inform them about it, they will lower your credit limit by the disputed amount until the dispute is solved. But you will have to pay the rest of your bill in time.
How to contact a credit card customer care?
Every card provider has their customer care service to help their customers, if you are facing any problem with your credit card, you call customer care anytime for help. You can get help from them in several situations like – Lost cards, payment issues, or any kind of problems related to your credit card. You can just call them, or you can mail them from your registered mail Id. You can find the contact details on the back of the card or in your monthly statements. You can also visit our credit card customer care page. You will find the contact details of your card provider there.
What to do if the Card and Co. are not hearing your voice? or how to file complaint against credit card company in India?
Every credit card provider has its own experienced customer service team to help its customer with any problems. Although the customer service authority sometimes fails to satisfy us with their service, in such situation you can contact the higher authority, you can follow the steps
Step 1: If you are not satisfied with the service of the customer care, you can contact the banking nodal officer, he/she may take time to solve your problem.
Step 2: If you failed to contact the nodal officer or if you are not satisfied with the service, you can take your complaint to Grievance Redressal.
Step 3: Most of the problems are solved at stage 2 but if you are still not satisfied with the result, you can take your complaint to the Banking Ombudsman, of your state, you can find the contact details of the Banking Ombudsman, from Reserve Bank of India’s official website.
Step 4: There is a good chance that your problems will be solved in step 3 because the bank also tries to negotiate the dispute. But if your problem is not solved yet, you can take legal action against the card provider or the bank. But before taking any action, ask yourself if your problem is worth taking legal action or not? Because of legal procedures, you will have to spend way more money than you can imagine. So it is wiser to negotiate the problem with the bank.
If you are an HDFC credit card user and you want to file a dispute then you can find the hdfc bank credit card dispute form here.
What parameters are evaluated for the CIBIL score/ how to calculate cibil score for credit card or what is a good cibil score for credit card applications?
CIBIL Score is a three-digit number that shows the creditworthiness of a customer, the credit score is issued by the credit bureau named TransUnion CIBIL. CIBIL score ranges between 300 to 900, and any CIBIL score above 750 is treated as a good CIBIL score.
However, there are some parameters, which are evaluated before deciding a CIBIL score.
- Payment History – A good repayment history can make your CIBIL score higher if you pay back your loans in time it can create a good impact on your CIBIL score.
- Credit Mix – there are two types of loans, secured loans, and unsecured loans, if you can maintain a balance between your secured loan and unsecured loans, it can create a good impact on your CIBIL score.
- Credit utilization ratio – Credit utilization plays an important role in determining your CIBIL score, high credit utilization ratio can make a bad effect on your CIBIL score, therefore is wiser to keep your credit utilization ratio around 30%.
- Too many applications for loans – If you apply for too many loans within a short period (6 months or so), it can negatively affect your CIBIL score.
Having a good CIBIL score is always helpful, especially when you are applying for a loan or a credit card. A good CIBIL score will help you to get a bigger loan or a credit card with a high credit limit, therefore everyone should try to improve his/her credit score.
What is Payment History?
Payment history is the record of your repayments, it contains all the details of your missed, delayed, and on-time payments, payments history helps to build your creditworthiness, while applying for a loan, creditors also send their customer’s payment history to the credit bureaus, and they determine your credit score depending on it.
As said before, payment history plays an important role in determining a credit score. Creditors send their customer’s payment history including late payments and missed payments, to the credit bureaus, and a bad history can affect your credit score badly.
Therefore everyone should try to keep their payment history clean, and it can be done, just by making payment on time. You can also use the auto-pay feature to pay your bills automatically.
What is the ‘New Lines’ of credit?
A line of credit is a special type of loan where the customer can borrow money against a pre-approved limit set by the financial institution. There is a difference between normal loans and a line of credit, in normal loans, you will get the entire loan amount in your hand, with loan approval, and you have to pay interest for the total loan amount. But in line of credit, you can make withdrawals according to your needs, within the approved limit, and you have to pay interest only for the amount that you have used. The credit card is an example of a line of credit, but unlike a credit card, there is no interest-free or grace period in line of credit, the creditor will start calculating the interest from the day you make a withdrawal.
A line of credit can be beneficial sometimes, especially when you need a big amount of cash. The benefit of the line of credit is its interest rate is lower than normal loans, you can take the amount for your approved limit according to your needs, and you have to pay for the amount you used.
How credit cards can affect our credit score?
A credit card is a very helpful financial tool that can improve your CIBIL score, but if used irresponsibly it can affect your credit score more than anything else. The credit score is a very important number in finance. It shows your worthiness, a higher credit score can help you to get a big and easy loan approval or a credit card with a high credit limit. Therefore, it is important to know how a credit card can impact your credit score.
- Repayment history: Nearly 35% of your credit score depends on your repayment history, so to maintain your credit score, you have to keep your repayment history clean. And this is done just by paying bills timely and avoiding the minimum due in credit card bills.
- Utilization ratio: Another important parameter of calculating the CIBIL score is the credit utilization ratio. Using most of the available credit limits creates a bad impact on your credit score. It is recommended to use around 30% of your total credit limit, using above the limit can affect your credit score. If you think with your present credit limit it is hard to maintain that limit then request your card provider for a credit card limit increase. And if you have a good credit history, then there is a good chance that the credit card company will approve your request.
- Too many credit cards: Having too many credit cards can affect your credit score, not directly but if you have too many credit cards, it might be difficult for you to track all the payments, and it can create a default in bill payment. Also, it can be a sign to the creditors that you are too much dependent on credits, and this is not good for your credit score. You can use a credit card payment app to keep track of your credit card payment more efficiently.
- Credit age: Credit age is another parameter of credit score, an old credit card with a good history can improve your credit score, but closing such a credit card can negatively impact your credit score.
- Reduced credit limit – sometimes cardholders reduce credit limit, in such situations if your credit card uses remain the same, your utilization ratio will increase affecting your credit score.
What is a co-branded Credit Card?
Co-branded credit cards are like normal credit cards, but they bear both the card provider’s name and the merchant’s name, with whom the card provider has made a partnership. With these cards, you can earn big benefits including cash backs, reward points, gift vouchers, etc.
A co-Branded credit card can be beneficial for those who want to earn benefits from a specific brand, but before applying for a co-branded credit card, compare between the charges you pay and the benefits you earn, and if you find it beneficial, you can go for it.
How do the new EMV chip and the PIN system for the card work?
An EMV chip is a squire golden microchip that nowadays comes with almost every credit card. EMV chip and PIN system is a new technology that offers a new level of protection to your transaction. Unlike previously used magnetic stripe cards, the EMV chip generates some unique information for each transaction, and it makes it harder for hackers to hack the card.
Whenever you enter your card to any POS machine for a transaction, the machine reads the chip and asks you to enter your four digits PIN to match it with the information in the machine. This chip and PIN system has made your transactions safer, even if your card is lost or stolen, without your PIN no one can use your card at any stores or ATMs. But this system is not completely safe. If someone has your credit card he/she can use it for online purchases.
What is the CVV number?
CVV number is a three or four-digit number that comes with every credit card, it acts as a verification number. In most credit cards, you can find the number just beside the space where you have to sign the card. But in American Express credit cards the number is printed in front of the card, and it is a four digits number.
CVV number adds a layer of security to your card, it verifies if you have a physical copy of the card or not. Without a CVV number, an online credit card transaction cannot be completed, CVV confirms that if someone has got your credit card number, he/she cannot perform an online transaction.
What is add on credit card?
A supplementary or add on credit card is a secondary credit card that can be issued against a primary credit card, with a part of the primary card’s credit limit, and with the same benefits as the primary credit card. Card providers allow their customers to issue add-on cards for their family members of at least 18 years.
With an add-on card, one can enjoy the same benefits as a primary credit card, but with a lower credit limit. Some card providers do not allow airport lounge access in those cards. But add-on cards can help you to build or improve your credit score.
Supplementary cards are a part of primary credit cards, no matter how many add-on cards you have, at the end of the month, you will get a single statement containing all the spending. So add-on cards will make your credit card bill bigger. Also, it will increase your credit utilization ratio significantly.
Applying for an add-on card is simple, there are multiple options available, you can apply from your Net Banking or mobile banking account, you can also call the customer service to apply for an add-on card. If you want to apply for an hdfc add on credit card then visit our HDFC Bank FAQs page, you can find the complete application process there.
How do I find the Credit Card due amount? or What is total amount due in credit card?
The credit card due amount is the amount that you have to pay to your card provider. It is the total sum that you have spent with your credit card, and if you want to avoid interest, you should pay the due amount within the due date. There are many ways to check credit card balance they are discussed below:
- Through card statement – Card providers send detailed statements to every cardholder, you can find your total due amount with a detailed description of your expenses in the statement.
- Net banking – You can also check your card balance through net banking, you will find your total due amount in the My Account section. You can also view your due amount in the unbilled transaction when the statement is not generated. Now you may ask, what is unbilled amount in credit card? well, the unbilled amount is the sum of the transactions that you have made after bill generation. The amount will be reflected on your next credit card statement.
- Mobile Banking – If you have a mobile banking facility, you can check credit card balance from there. you can find all the details like total due amount, minimum due, due date, etc.
- SMS – Card providers also send SMS about your Total due balance and your available credit limit after every use of the card, but before you have to subscribe to the SMS alert facility.
- From customer care – You can also call customer service for the detail, and after verification, you can get all the information about the total due amount, due date, etc.
- From ATM – You can also know your card balance from an ATM, just enter your card then choose the Balance option and enter your PIN, and you can view the bill on the screen.
What are finance charges in credit card and how is it computed?
The finance charges in credit card are the charge that the card providers impose on their customers for borrowing money, but it is not applicable for every customer, only those who missed a payment, have a previous due in their account, or just have paid the credit card minimum due payment, are liable to pay the finance charge for their outstanding balance.
A simple formula for calculating your finance charge is – (Your daily average balance × days in your billing cycle × interest rate) ÷ 365 = your daily finance charge. The finance charges on credit cards are the highest rate of interest. It is like a death trap. If you fall into it, it is very hard to get out. Therefore every smart cardholder should try to avoid paying the finance charge.
What do the terms credit card billing cycle/date mean and are they subject to change?
The billing date or billing cycle is the period between two billing dates. The time period may vary from card to card, however, it ranges from around 28 to 30 days. During a billing cycle, you make purchases with your credit card, and at the end of the billing cycle, you will get a bill that says the total amount you have to pay the card provider. And the billing date is the last day of your billing cycle when your bill is generated. Now the question is how to know credit card billing date? You can find your billing date in your card statement.
The credit card billing cycle or billing date is very important for a credit cardholder, so if you are not comfortable with the dates, you can change them. You can just call customer service and request them to change the billing cycle, or you can change the date from your Net Banking account.
What is the minimum amount due in credit card bills?
The minimum due in credit card means the minimum amount of payment that you have to make towards your credit card bill within your due date to avoid late payment charges. Normally it is around 5% of your total bill amount, though it may vary. Paying the minimum due amount can save you from credit card late payment charges or getting flagged as a defaulter. But if you just pay the minimum due amount, you still have to pay interest for the rest of the due amount, although, if you stop using your credit card, the due amount will increase day by day because of the high credit card interest rate. And if it continues for a few months or so, you will be in great financial trouble.
Minimum due payment is not an option for easy bill payment, only if you are in trouble and you cannot pay the total due amount in time, you can go for it. But if you pay the minimum due amount, make sure not to use your card, until you pay the amount in full.
What happens if we pay minimum due on credit card?
Credit card companies offer their cardholders to pay a minimum percentage of their due amount, to avoid the credit card late payment charges, and to save themselves from being a defaulter. It seems to be beneficial but it is a very clever trap.
When you pay the minimum due in credit card bill, only a small portion of your bill amount gets paid, but you will have to pay for the unpaid amount, even if you stop using your card, your due amount will increase day by day. There will be no interest-free period and if it continues, you will soon find yourself in a debt trap.
Credit card providers create a habit of overspending among their cardholders, with their benefits and offers, especially with reward offers, overspending makes a huge bill amount at the end of the credit card billing cycle, which sometimes can be hard to repay. Always remember credit cards are not a replacement for salary or bank balance, only use them when you have the money to pay back.
What is a foreign currency transaction mark-up?
Credit cards are globally accepted, but to make a credit card transaction at an outlet outside your country, you have to pay a charge for the currency conversion, this charge is called the foreign currency conversion mark-up. It is also applicable when you shop at any foreign website with your credit card. Normally the charge ranges around 3%, but it may vary from card to card. If you often travel internationally, then try to choose a credit card with a low foreign currency transaction charge.
What is Credit Card Balance Transfer?
credit card balance transfer is the feature that allows you to transfer the outstanding balance of a credit card to another credit card, to avail a lower interest rate on credit card dues. When you transfer the balance, the second card, to which the balance is transferred, pays the bill for you. You also have to pay a processing fee for it, although some credit cards come with zero processing fee plus a certain interest-free period. A balance transfer can be beneficial, it can help you to get a lower interest rate against your dues.
Is there any limit on the total balance I can transfer via Credit Card balance transfer?
Technically there is no limit on credit card balance transfer, but you can transfer an amount that is less than or equal to the total credit limit of the card in which the fund is transferred. For instance, you have a credit card with a total credit limit of Rs. 60,000, so you can only transfer a balance to this card that is less than or equal to Rs. 60,000.
Therefore you should check your credit card balance before making a balance transfer. In case if you don’t know how to check credit card balance from your net banking or mobile banking account, just call the customer service of your card provider and ask them for your credit card balance.
What happens if I want to prepay my credit card emi?
Prepayment is a financial term that means, paying off a due or EMI before its due date. Prepayment can save a lot of interest, but it depends on when or how much amount you have prepaid. When you make a prepayment, the principal amount gets reduced by the paid amount, and if the paid amount is big enough, your total payable interest amount will decrease a lot. Also if you can make a full prepayment, you can save a huge amount of interest. Although, in a fixed-rate loan, repayment can cause a penalty, so before making a prepayment, make sure it is not a fixed-rate loan.
What does zero lost card liability mean?
Zero lost card liability is a feature which nowadays most cards come with, it gives the cardholders complete coverage against lost/stolen cards or any kind of frauds, now laws have also limited the liability of the cardholder. But to avail complete coverage against frauds, the cardholder needs to inform the card provider about it within 2 to 3 working days.
Now, most credit card companies have adopted the credit card fraud detection system. But it is always good to be safe, so every cardholder should try to keep his/her card safe.
What is revolving credit?
Revolving credit is a loan facility, where you can borrow within a fixed limit, for a certain period, and after paying the borrowed amount completely or partially, you can borrow again. The amount is set by the creditor, according to your eligibility. Suppose you have a revolving credit account with a credit limit of Rs. 80,000. Now you have taken a loan of Rs. 40000 against the limit, which means you have Rs. 40000 limit left in your account and you can take a loan against it anytime you want.
What is a chargeback?
A chargeback is like a refund. When a cardholder successfully wins a dispute the card provider or the bank removes the disputed charge, and this process is called the chargeback. Several situations that can cause these payment disputes are – Fraud, Online shopping issues, suspicious transactions, etc. The chargeback process may be very long; it contains several steps and sometimes it can take up to 90 days to show any result. And the chargeback is the sign of your victory.
How to activate online transactions on a Credit Card?
If you are not able to use your credit card for online payments that mean online transactions on this card have been turned off. This is because of the new regulation of RBI, but you can turn it on very simply with your mobile or laptop. The process of activating the online transaction on your credit card is simple. Just log on to your Net Banking account and then go to the card section, here you will find the credit card tab. In the credit card section, you will find the online transaction option, just turn it on and you are ready to go.
Sometimes it happens when your credit card is expired, just verify the expiry date of your card, and if it is expired, apply to your card provider for a new card.
How to activate credit cards for international transactions?
Sometimes international transactions on credit cards are turned off, but that does not mean that you cannot use your card for international transactions, you just have to turn on the international transaction manually. To do so, log in to your net banking account, then go to the credit card section and select the request option, then you will find the international or domestic option, click on the international option and you are set.
If you are an Axis Bank credit card user and you are thinking about how to activate axis bank credit card for international use then feel free to visit our Axis Bank credit card FAQ’s page to get more detailed instructions.