All about CREDIT CARD and things to AVOID

 Describe a credit card.

Banks and Non-Banking Financial Companies both offer this financial product (NBFCs). It offers cardholders quick credit access. The amount of credit fluctuates according to a number of variables, including the cardholder's age, income, and so forth. Cardholders who use a credit card to request credit have the option of paying it back all at once or in instalments by the due date.

[Means a card like debit card only, but the amount that card holds is not belongs to you but you can use that money as a loan which you can repay back within 30-50 interest free days, E.g- you took Rs-35000 from credit card and thus you have 30 to 50 days to repay back to bank and you have to pay only Rs-35000 if you are paying back within due date. Which is generally between 30 to 50 days.]

Why do you need a credit card?

It can be a useful tool for earning points that you can then use to pay for purchases, take advantage of travel benefits, handle crises, and raise your credit score.

It can be used for taking loan in case of emergency. As now a days we usually don't go and look for family people and friend to borrow money in case of emergency. Hence at that time it works as wonder.

How can I use reward points? What are they?

You gain further benefits when you use your credit cards to make purchases in the form of reward points. The awards you earn never expire and can be used in full to make any payment without incurring any costs. You do not receive the same advantage as others on the market. If enough of these awards are accumulated, they may even be enough to cover the cost of any desired product or flight.

[Rewards validity varies with the bank].

How to apply for a Credit Card online?

Visit any bank website and look out for credit card section. Look for the eligibility criterion (if any) then apply.

                                                   

Things you need to know before taking credit card and Don't do with the credit card.?

1. Don't withdraw cash from ATM using credit card, as it is chargeable and you have to pay the interest on the amount you have withdrawn from the first day until you repay fully.

2. Don't use money more that 30% of the credit limit. Eg. If the limit is 1lac try not to use above 30k unless its too emergency, as it will decrease your credit score even if you have paid them timely.

3. Always pay full outstanding amount and not only minimum amount. If you pay only minimum amount 25-30% of interest will be chargeable on the remaining amount from the first day you use that money.