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The number of credit users has increased significantly. While getting a Credit Card has now become easy, not many people know how to make the most of it. This article gives you valuable tips on how to use it smartly.
Credit Cards work as convenient financial tools. They provide a predetermined credit limit to the
users, allowing them to make purchases up to that amount. Each transaction carried out with a
Credit Card basically means borrowing money from the card issuer.
At the end of the billing cycle, users receive a detailed Credit Card statement of their
transactions and the amount owed to the issuer. They can pay the full balance or a minimum
amount by the due date. However, if the full balance is not paid, a high-interest amount is
charged to the customer.
Credit Cards offer various benefits, such as reward points and cashback. Responsible Credit Card
usage can help individuals build a positive credit history, which will help them to obtain loans
and financial assistance in the future. However, late payments can lead to additional fees,
penalties and negative impact on credit scores.
To find the best Credit Card in India, consider factors such as rewards, annual fees, interest rates and additional perks. It is important to do research and compare different options to find the card that aligns with your financial goals and lifestyle needs. Credit Cards come in various types, each tailored to different needs and lifestyles. Some of the best Credit Cards include
These cards offer reward points for every purchase, which can be redeemed for cashback, travel miles or merchandise.
These cards earn you cashback with every purchase you make. The amount you earn is usually a percentage of each purchase.
Ideal for frequent travellers, these cards offer travel-related perks such as airport lounge access, air miles and travel insurance.
Designed for individuals who frequently travel using their vehicles. Fuel Cards offer cashback or discounts on fuel purchases.
Secured Cards require a security deposit but can help build or rebuild credit scores. They are suitable for individuals with a limited or poor credit history.
These cards cater to business owners, offering expense-tracking tools, rewards and higher credit limits.
Credit Cards offer a range of features and benefits for different financial needs, making them a valuable tool for managing finances and enhancing purchasing power. Some of these are:
Credit Cards offer a convenient payment method for online, in-store and global purchases, eliminating the need for carrying cash.
Many Credit Cards have a rewards programme, allowing cardholders to earn points, cashback or miles for every purchase.
Credit Cards provide access to emergency funds during unforeseen circumstances or financial emergencies.
Using Credit Cards responsibly can help build a positive credit history, which is essential for obtaining loans and financial opportunities in the future.
Credit Cards often offer purchase protection, including extended warranties, price protection and fraud liability coverage.
Certain Credit Cards offer travel-related perks, such as airport lounge access, travel insurance and discounts on flights and hotels.
Credit Cards provide a convenient way to track expenses and manage budgets through monthly statements and online account access.
Cardholders may receive special offers, discounts and exclusive deals from partner merchants and retailers.
Many Credit Cards now feature contactless payment technology, offering a faster and more secure way to carry out transactions.
The credit limit denotes the maximum amount a cardholder can borrow on their Credit Card. The card issuer determines it based on the income, credit score and repayment history. Exceeding the credit limit may incur over-limit fees or lead to declined transactions. Managing your spending within this limit is vital to maintaining a positive credit standing and avoiding additional charges.
Interest rate, expressed as Annual Percentage Rates (APR), signify the cost of borrowing money on a Credit Card. They can vary based on the card issuer and may fluctuate due to market conditions and individual creditworthiness. Understanding interest rates is crucial as they affect the total amount owed on the card balance if not paid in full each month. Managing Credit Card balances responsibly can help minimise interest charges and maintain financial stability.
Credit Cards come with various fees and charges, such as annual fees, late payment fees, cash advance fees and foreign transaction fees. These fees can significantly impact the overall cost of using a Credit Card. You can make more informed and cautious choices by being aware of these charges and considering them when budgeting and making financial decisions. This understanding can help you avoid unnecessary expenses and manage your finances more effectively.
| Eligibility Criteria | Documents Required |
|---|---|
| Minimum Age: 21 years | Proof of Identity (Aadhaar Card, Passport, PAN Card) |
| Maximum Age: 60 years | Proof of Address (Utility Bill, Rental Agreement) |
| Income Proof | Income Proof Salary Slips, Income Tax Returns |
| Credit Score | Credit Score A good credit score of 750 and above |
| Stable employment | Bank statements |
A Credit Card is a financial instrument that allows you to avail of credit on all your financial transactions. In simple terms, a Credit Card is a debt instrument that allows you to buy things now and pay for it later. All Credit Cards come with a specific credit limit, which is set by the issuer based on your credit score and your eligibility criteria.
The maximum credit limit sanctioned to the Credit Card users differs from user to user based on their eligibility criteria, and the credit score. When you apply for an online Credit Card, ask the issuer for the highest possible credit limit. Apart from increasing your purchase limit, the higher credit limit will also improve your credit score.
Most Credit Cards in India come loaded with a host of reward programmes and offers on a certain type of spending. Some high-end cards provide free access to the airport lounges, while others provide additional reward points on purchasing grocery or fuel recharge. Do your research well about the reward point system and use the card strategically, so that you get the best out of the rewards and benefits.
Credit Card companies impose high-interest rates and penalty fees on outstanding dues and late repayments. So, to avoid paying those heavy interest and penalties, make sure that you pay out dues on time. This will also improve your credit ratings.
You can use the Credit Card to withdraw cash from the ATM. However, it is advisable that you avoid using this facility unless it is an emergency. ATM withdrawal attracts heavy Credit Card interest rates.
A lot of people have this wrong notion about Credit Card payment that paying the minimum amount is enough. However, the Credit Card issuers charge a hefty interest on the balance amount. So, to avoid paying those charges, you must try to pay the dues in full every month.
Apart from paying your bills on time, make sure that you scrutinise your monthly statement and understand what charges are levied in your bill. Also, look if there is any suspicious transaction. This could be because of Credit Card fraud. Never share your Credit Card details with anyone.
If you use your Credit Card for online purchase or buying things from a local store, make sure that the retailer is a trusted one. This will minimise the risk of your Credit Card identity theft. Now, that you know how to use Credit Card smartly, you can apply for a Credit Card online and make the most of it.
Maintaining a close watch over your expenditure is of utmost importance, especially when it pertains to Credit Cards. These plastic cards can be incredibly convenient but without careful management, they can quickly lead to financial trouble. To help you stay on top of your Credit Card expenses, consider the following pointers:
Establish a monthly budget that includes specific allocations for Credit Card payments. This will give you a clear picture of your financial obligations and prevent overspending.
Keep a track of every transaction you make using your Credit Card. Utilise digital tools such as mobile banking apps or personal finance apps, to monitor and categorise your spending.
Credit Cards often come with high-interest rates. If you carry a balance, the interest charges can accumulate rapidly. Paying off your balance in full each month can save you from unnecessary interest expenses.
Before making a purchase, ask yourself if it is a necessity or an impulsive desire. Consider waiting for a day or two before finalising a non-essential purchase, giving yourself the time to evaluate if it aligns with your financial goals.
Many Credit Cards offer Rewards Programmes such as cash back or travel points. Take advantage of
these benefits by using your Credit Card strategically for purchases you would make anyway but
always ensure you can pay off the balance.
By implementing these pointers, you can maintain control over your Credit Card spending and
prevent debt from spiralling out of control. Remember, financial responsibility starts with
being aware of your spending habits and making informed decisions.
A Credit Card is like a wallet that lets you borrow money to buy things. You can repay what you owe later, but if you fail to repay the borrowed amount on time, you will have to pay extra as interest.
The main difference between Debit Cards and Credit Cards is where the money comes from. With a Debit Card, you spend money directly from your bank account, so you can only spend what you have. But with a Credit Card, you borrow money from the bank, which you must repay later.
A Credit Card limit is the maximum amount of money you can borrow on your Credit Card. The bank sets it based on your income, credit score and repayment history. Exceeding the credit limit may result in additional fees or declined transactions.