What Is A Credit Card?
A credit Card or Plastic Money is a payment card issued to users to pay a merchant for their goods and services, based on the customer’s promise to the bank for the repayment of the amount with agreed charges.
The Banks create a revolving amount and grant a credit limit to the customers.
From this credit limit, the customer can borrow money for payment to a merchant, do online transactions, pay the bills or can use a cash advance.
A credit card is a little bit different from a charge card.
Customers can use a credit card as per their needs and repay the amount within the interest-free period or in Easy Monthly Instalments with a nominal Rate of Interest. (If Bank allows a customer to pay in parts)
While in charge cards customers have to repay the full balance each month within the time limit.
Credit Card Payment Gateways
Most of the credit cards come with third-party payment systems like Visa, MasterCard, Discover, Dinners etc.
While a few cards like American Express use their payment gateway called Amex.
Visa & MasterCard card comes with 16 digits unique card no. and Amex & Dinners comes with 15 & 14 Digits.
Credit Card Application & Approval Process
Each bank is having its own credit card application and approval criteria.
But most banks prefer to apply with relative documents.
This could be different as per bank, card & process.
Private Sector Banks & Multinational banks also offer online applications and instant approval processes to the customers, where customers receive calls from bank representatives for documents if the card gets approved.
After the documents collection the bank process the customer’s card and used the customer’s credit history to decide the card limit.
Sometimes the bank also uses third-party vendors to verify customer data.
Included job profile, monthly income, residence, existing debts and pending if a customer has.
Banks also use credit reporting agencies to shortlist customers.
In India, Credit Information Bureau India Limited (CIBIL) keep customers’ credit data and bank use CIBIL Report to cross-check customer credit trust.
Credit Cards Grace Period
A credit card’s grace period is the time in which the cardholder has to pay the balance before interest is assessed on the outstanding balance.
Grace periods may vary but usually, range from 20 to 55 days depending on the type of credit card and the issuing bank.
Some policies allow for reinstatement after certain conditions are met.
If a customer is paying the balance after the due date, some extra finance charges will be added to the bill and the grace period will not apply.
After the grace period, ROI charges will be different in each bank.
In some cards, extra charges will not be applied to the existing or outstanding balance.
Where the bank has already added fines in the last bill.
Interest Charges
Bank usually waived off interest charges if the customer paid the amount within the grace period. Where customers have to pay for their uses only.
But the bank will charge extra interest or a late fee if the amount is not paid within the time limit.
Credit Card Types:
-
Business Credit Cards
The business Credit card is a special card issued to the registered business and organizations. These cards can be used for any business purpose.
-
Secured Credit Cards
A secured credit card is secured by any fixed security deposit or account owned by the card user.
In India, customers can get this card against a Small Fixed deposit starting with 20K even if their existing credit score is low.
In the case of any default and no payments situations, Bank will withdraw bills from your secured amount.
-
Digital Credit Cards
A digital card is a digital cloud-hosted virtual representation of any kind of identification card or Credit Card, which we use on a normal basis.
Useful links
HDFC Bank Credit cards
SBI Credit Cards
ICICI Bank Credit Cards
Axis Bank Credit Cards
IndusInd Bank Credit Cards
Kotak Bank Credit Cards
Yes Bank Credit Cards
RBL Credit Cards
Amex Credit Cards
Bank Of Baroda Credit Cards
IDFC First Bank Credit Cards
Au Bank Credit Cards
Fuel Credit Cards |
Best Credit Cards In India |
Money-Back Credit Cards |
| Cashback Credit Cards | Shopping & Cash Back Credit Cards | Low APR Credit Cards |
Premium Credit Cards In India |
Air Travel Credit Cards | Balance Transfer Credit Cards |