Credit Card is like a postpaid mobile connection in which if we can use more money than we have in our account and deposit it later . Even if you do not have money in your bank account , you can still do online or offline shopping through your credit card .
You must have seen many times when you see a product on an online shopping site , then there is also an option of EMI . When you click on that option , a credit card is asked in it . And if you have a credit card , then you can pay little by little in installments ( EMIs ) without paying the entire amount at once .
It is very important for you to know that by paying money in such installments from the credit card of ICICI , HDFC , SBI , PNB , YES Bank or any bank , you will also have to pay bank interest and all banks have their own interest rates . What is a credit card What are the advantages and disadvantages of credit card ? And we will tell you all other information further.
What is Credit Card?
Credit card issued by a bank Debit card is a plastic card like an ATM card, with the help of which any person who has an account with the bank can do money transactions through credit card anytime, anywhere.
Where he can provide any thing or facility of any kind. All banks have their own different laws and rules regarding credit cards, which are already set by the banks. Friends, a person holding a credit card pays the bank for whatever shopping he does in a month, that is, a credit card holder gets 50 days to make payment.
What is a credit card? Advantages and Disadvantages
Whether we have a good job or how much money we have . But sometimes there comes a time when we have to buy some goods and at that time we do not have that much money in our bank account . Credit card comes in handy at such times . Using a credit card , we will be able to buy those goods by taking money as a loan .
There is a limit to the credit card which can be different . To return this money , there is a grace period which is from 25 to 30 days , if we deposit the money within this time , then no interest will have to be paid . But later they have to return the money to the bank in the form of a credit card bill along with interest . Let’s know all the advantages of credit card :
Credit Card Benefits
- With a credit card , we can make purchases more than our outstanding balance .
- Online shopping of any item can be done on installments (EMI) .
- With a credit card , we get money there without interest for a fixed time . When we do shopping or any other payment with our credit card , the bank gives 50 days to repay that money .
- If we pay the credit card bill within 50 days , then we do not have to pay any interest for that money .
- You do not have to always carry cash with you , you can make any purchases or pay bills . And Cashless Transaction gets promoted .
- Due to being a credit card , Coupen codes and Cashback offers are available from the bank , due to which a lot of money is saved .
- At the end of the month , we keep getting the statement of all the expenses . Which helps in making your budget
Disadvantages of Credit Card
There are many hidden charges in using credit cards , which many people do not know . Along with this comes many other taxes and fees such as late payment fees , renewal fees and processing fees . Which increases your expenses even more
- As you I have come to know that shopping can be done without any money with a credit card , so many times we do not care how much has become due and because of that we make more purchases .
- If we do not pay the outstanding amount within a certain time, then we will have to pay interest which is very high .
- There is also a danger like credit card fraud , someone credit card in ways like else can shop with your password theft , lost credit card and credit card clone.
- However this is very difficult to do . To avoid this , always look at your Bank Monthly Statement carefully so that if something like this has happened then it can be known .
How to use Credit Card Properly
- Before use , read all the terms and conditions thoroughly
- Pay with credit card as much as you can pay back.
- Pay the credit card bill in time to avoid interest
- At least 30-40 % credit card limit must be kept for emergency.
- Use only when needed . Avoid debt as much as possible
How to Apply For Credit Card
When you are sure that you are eligible to take any bank credit card then you can apply for credit card . Nowadays almost every bank is giving credit card facility to its customers. For this you can apply according to the following process:
- First of all, you fill your personal details in the form received from the bank. In this, your full name, age, date of birth, home address, mobile number, email id etc. are given.
- The following documents are attached with this form:
PAN Card, Driving License, Passport, Voter ID, Aadhar Card (Any one) for ID Proof
Signature Proof for PAN Card, Driving License, Passport (any one)
Voter ID, Driving License, Aadhar Card, Passport (any one) for Address Proof
Your passport size photograph;
- In the column containing your Employment Details, the full name, address and phone number of the place where you work will be given.
- You have to give your bank details in which your full name, address and full details of your account are
- If you already have a credit card, then full details will also have to be given.
The bank verifies your Credit Card Application Form completely. After being completely satisfied, your credit limit is fixed and you are issued a credit card.
How to Use Credit Card (Tips)
After taking a credit card, it should be used in such a way that you can take advantage of it, for this you can take care of the following things:
- While spending the credit card, keep in mind your credit limit.
- Avoid late fees by paying your credit card due amount on time. This will not spoil your credit rating.
- Whatever you spend with your credit card, do it keeping in mind your budget. Otherwise the balance of your income and expenditure will get disturbed.
- Pay within the Repayment Time Limit that banks give you, in which you have to pay your Due Amount. If not, banks can impose penalty on your total amount .
- Keep complete details of what you are spending with the credit card so that when you have to make credit card payment, you can see the Charges and Actual Expenses levied by the bank separately.
Credit Card Eligiblility Criteria
If you want to take a credit card from any bank, then before that you should know some things. This is the essential information that the bank knows about you before giving you a credit card. Based on this information, the bank decides whether you are eligible for a credit card or not. These important facts are as follows:
1. Credit Score/Cibil Score – Credit Score:
If you have already taken any bank loan or you have credit of any other bank then it shows your loan payment history. On the basis of this history, the bank gives you the credit score and it is commonly known as CIBIL score . The better this rating is, the easier it is for you to get a credit card. Based on this, banks make an estimate whether you repay the bank loan on time or not. In case of poor rating or credit score, you may find it difficult to get a credit card.
2. Income/Salary – Your Income:
Banks also take complete information about your income before giving you a credit card. If your income is less than the income limit set by the bank, then the bank may consider giving you a credit card. For example, if the bank has kept the Income Limit 20000 for giving credit card and your income is less than that then you will not be eligible to take credit card.
3. Age – Applicant Age:
Banks give credit cards only to a person who is 18 years of age or above. In other words only an adult can apply for the credit card.
4. Borrowings – Other Credit Risks:
If you have taken a loan more than the repayment capacity of your loan, then the bank can refuse you for the credit card even in this situation. For example, if you have taken a home loan and a car loan from different banks, whose total monthly installments are more than 60% of your income, then in this situation the bank will reject your credit card application. Can do.
5. Employer – Your employer:
Before giving credit card, the banking company also wants complete information about your employer from you. If this information is not Satisfactory and you are working in a place that is not Permanent, you may not get a credit card.
6. Your dealings with the bank:
Nowadays almost everyone gets their salary through the bank. In such a situation, it is easy if your Salary Account is in the bank from where you are applying for the credit card.