Understanding The Background Of Credit Card.

Credit cards –is a plastic cards that gives access

to cardholders to make purchases of goods and sarvices
Credit cards impose the condition that cardholders pay back the
borrowed money, plus interest, as well as any additional
agreed-upon charges in conditional time period A credit card, after
all, isn’t just a only payment method

it’s a loan.on cardholders Every time you swipe, you’re

using part of your pre-approved credit limit (read: the
bank’s money) to make that purchase

This can make credit cards a helpful tool if you want to buy
something but don’t have enough money in your current account.
If you want to book a holiday, for example, or your washing
machine suddenly breaks, using a credit card allows you to pay
back the balance at a time when you can afford it.
Credit cards includes terms
1. annual fee - This is the fee you will be charged each
year — some credit card company does not charged any
fee from card holders or some other bank does not
charged first year annual fee The annual fee 100
rupee to 2000 rupee typical credit card fee is around
3000to 5000 rupee year

 ate payment fee: If you pay late, you will incur a fee
typically greater than $30.

 Returned payment fee: Payments you submit that aren’t

approved may be subject to a fee usually upward of 500

 Foreign transaction fee: Some cards charge a fee for

purchases made outside the india . that is typically around 3%.

 Cash advance fee: Cash advances you request most likely

will be charged a 3%-5% fee of the amount requested.

 Balance transfer fee: Any balances you transfer from an

existing credit card to an eligible new card may be subject to a
balance transfer fee, on average 3%-5% of the amount
transferred.

credit limit - you’re approved for a credit card, the

bank authorizes a credit limit — the maximum amount you can

borrow — .one time, or the size of your ongoing loan. It’s
determined by the credit card issuer
 Your credit limit will depend on other factors such as your
income, and how much available credit you have on other cards
its wills also depends on credit score

Most important terms

This stands for Annual Percentage Rate. If you are not

able to pay your monthly statement balance or you only
pay some amount of your statement balance this is the
rate for you

This is term whare too many cardholders goes into trap

Hare is also term called minimum payment

By term suggests the minimum payment is the percentage

of the outstanding balance that is used to calculate the
card holder's minimum payment for the month. Banks in
India generally charge 4% to 6% of the outstanding
balance as the minimum amount due. If the cardholder
converts amount their expenditure to EMI or if they use
the EMI balance transfer option, the same calculation
will be added to their minimum amount due . For
example, let us assume that the cardholder has made a
purchase of Rs.20,000 on July 15 and the due date is
August 26, the minimum due will be Rs.1000 (5% of the
Rs.20,0000)
Paying up the minimum amount due can help you avoid paying late
payment fee, which is usually a flat fee between ₹200 and ₹1,000,
depending on the amount and your card provider, but interest
on the outstanding bill amount will not be waived off .

If you only pay the minimum: At the end of the month

in which you have overspent, the minimum amount due can
relieve you as it is usually much lower than the total
dues. However, if you get into the habit of paying up
only the minimum amount due, the total bill will

multiply quickly.Though minimum amount due is small and

affordable, paying just that does not save one from the
interest charged on their credit card expenses.
Financial Advisor always advice to cardholders pay
more than the minimum amount due who is regularly keep
paying the minimum amount due on their card. In fact,
they end up making it a habit. Although the minimum
amount due is easier to settle,

Take advantage of interest free loan

When you pay for something with your credit card you are
essentially borrowing money – and credit cards charge interest
on the loan
. However, most cards come with an interest-free period of up to
50 days, so if you pay off your bill in full each month, you pay
no interest.

. When you paid amount by debit card the bank

instantly debited the amount from your bank
account but when paid the amount by , your credit
card your money remains in your checking
account until you pay your credit card bill.

It will give some extra time to your funds for this extra
time can be helpful in ways

. It will benefits of , the time value of money

, however in will add to wealth. Postponing payment

makes your purchase that much cheaper

Personal Finance Credit

10 Reasons to Use Your Credit Card

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By Amy Fontinelle

Updated Aug 4, 2018

Personal finance experts spend a lot of energy trying to prevent us from using credit
cards – and with good reason. Many of us abuse them and end up in debt. But
contrary to popular belief, if you can use the plastic responsibly, you're actually much
better off paying with a credit card than with a debit card and keeping cash
transactions to a minimum. Let's examine why your trusty credit card comes out on
top.
1. Signup Bonuses

There's nothing like a welcome-aboard perk. Applicants with good credit can get
approved for credit cards that offer signup bonuses worth anywhere from $50 to $500
(and sometimes even more). Other cards thank newcomers by bestowing on them a
large number of reward points that can be redeemed for fun stuff (more on those cards
below). In contrast, a standard debit card that comes with a bank account offers zero
money and minimal or no rewards.

2. Rewards and Points

Many credit card rewards work on a point system, where you earn up to five points
per dollar spent. Often, companies will offer special three-month promo periods
where spending in a certain category, like restaurants or transportation, nets you
double or triple the usual points. When you reach a certain point threshold, you can
redeem your points for gift cards or buy items outright from the credit card company's
online rewards catalog.

Your credit card rewards options are almost endless. Get a co-branded card issued by
a gas station chain, a hotel chain, a clothing store or even a nonprofit organization like
AAA and your rewards may increase even faster. The trick is to find the card that best
fits your spending patterns. Doing the inverse – altering your spending patterns to fit
with a particular card – is foolish. But if you're already spending a few days a month
patronizing a particular hotel or airline, why not use the card that will encourage your
continued patronage by offering you discounts?

10 Reasons To Use Your Credit Card

3. Cash Back

The cash-back credit card was first popularized in the United States by Discover, and
the idea was simple: Use the card and get 1% of your balance refunded, regardless of
what you bought or where you bought it. Today, the concept has grown and matured:
Some cards now offer 2%, 3% or even 6% back on selected purchases. Some cards,
like the Fidelity Rewards card, offer a higher rate of cash back (2% on all purchases),
but only if you deposit your cash directly into a Fidelity investment account.

4. Frequent-Flyer Miles

This perk predates almost all the rest. Back in the early 1980s, American Airlines,
followed closely by United Airlines and US Airways (now merged with American),
began offering the chance to earn frequent-flyer miles via an affiliated credit card.
Now, it seems like every airline offers at least one credit card.

Cardholders rack up miles at a rate of one mile per dollar spent, or sometimes one
mile per two dollars spent. The price of the plane ticket you ultimately redeem your
miles for will determine how valuable this credit card reward is, but many frequent
flyer cards are made immensely more valuable by their mileage signup bonuses.
These are often enough to put you 50–100% of the way toward a free flight within a
month or two.

5. Safety

Paying with a credit card makes it easier to avoid losses from fraud. When a thief uses
your debit card, the money goes missing from your account instantly. Legitimate
expenses for which you've scheduled online payments or mailed checks may bounce,
triggering insufficient funds fees and making your creditors unhappy. Even if not your
fault, these late or missed payments can also lower your credit score. It can take a
while for the fraudulent transactions to be reversed and the money restored to your
account while the bank investigates.

By contrast, when your credit card is used fraudulently, you aren't out any money –
you just notify your credit card company of the fraud and don't pay for the
transactions you didn't make while the credit card company resolves the matter.

6. Keeping Vendors Honest

Say you hire a tile setter to redo your kitchen floor. Workers spend the weekend
cutting, measuring, grouting, placing the spacers and tiles and letting the whole thing
set. They then charge you $4,000 for their troubles (minus the deposit you paid up
front).

You draw upon your savings account and write a check. But what do you do when, 72
hours later, the tile starts to shift and the grout still hasn't set? Your kitchen is now a
complete mess, and that vein in your forehead won't stop throbbing.

You can take up the issue with your state licensing board, but that process could take
months and the contractor still has your money. That's why, if you can, you should
pay for a big-ticket item like this with a credit card. The card issuer has an incentive
to discourage fraud among its vendors, and if there is a problem, they have a
mechanism to try to resolve it. More important, if you dispute the charge, the card
issuer withholds the funds from the tile setter, and not only will you often get your
money back, you might even get help finding a new contractor.

7. Grace Period

When you make a debit card purchase, your money is gone right away. When you
make a credit card purchase, your money remains in your checking account until you
pay your credit card bill.

Hanging on to your funds for this extra time can be helpful in two ways. First, the
time value of money, however infinitesimal, will add to wealth. Postponing payment
makes your purchase that much cheaper. Beyond that, your cash will spend more time
in your bank account, and if you pay your credit card from a high-interest checking
account and earn on your money during the credit card's grace period, the extra
interest will eventually add up to a meaningful amount.

Billing cycle: A set period during which you make

purchases. After the period is over, you will receive
a bill, and will have about a month to pay it.

Types of credit card

Rewards Credit Cards-Just as the name suggests, a reward

credit card rewards you when you use it to make a payment
or buy something. Used responsibly and carefully, reward
credit cards can provide you with a range of benefits
depending on the type of rewards your card offers, how
often you use it and how quickly you pay it back.

Typically, reward cards work by giving you a certain

number of points or a percentage of what you spend back
to you each time you use it. Some cards reward you for
spending in certain sectors, such as travel, and others for
buying certain things, such as groceries.

1.
2. Balance Transfer Credit Cards-Balance Transfer Credit Cards: made
fort those person which have already credit dents this is most suitable for already
have a lot of credit card debt. This type card allow you to shift your debt from your
current card to a new one, and give you a period of 6-21 months to pay it off
interest-free. There is usually a one-time balance transfer fee, though, of up to 5%.

This added one more advantages this give more time for payments

3. Fuel
or ges purchased Credit
Cards-
4. In this credit card the cardholders get special offers and
other great benefits for gas purchases or refueling. The card
also helps in saving a decent sum of money with its cashback
offers and fuel surcharge waivers. If you’re into a transport
business and spend heavily on fuel charges then this card will
help save money on your purchases. The benefits of such
cards are doubled with extra rewards and offer on travel,
shopping etc.
Some of the credit cards offering this service are-
IndianOil CITI Platinum Credit Card RBL Titanium Delight
Credit Card
HDFC Bank Regalia First Credit Card

secured credit card

A secured credit card is a type of credit card that is secured by a deposit
account or some other bank account in this bank give option to you that
your credit card can be secured some amount of deposit the secured
amount can be according to your card llimit its relly help full for for that
holders who apply for card in same bank in which cardholders have
secured deposit account

is also made for person whose montly income less as per bank condition
for credit card

e significantly less than the required credit limit, and can be as low
as 10% of the desired credit limit. This deposit is held in a
special savings account. Credit card issuers offer this because they
have noticed that delinquencies were notably reduced when the
customer perceives something to lose if the balance is not repaid.

The cardholder of a secured credit card is still expected to make

regular payments, as with a regular credit card, but should they
default on a payment, the card issuer has the option of recovering
the cost of the purchases paid to the merchants out of the deposit.
The advantage of the secured card for an individual with negative or
no credit history is that most companies report regularly to the
major credit bureaus. This allows building a positive credit history
co-branded cards
These cards are made for specific type of usage . , if
you are a traveller, or full time online buyer
these card give you some exclusive benefits for
example if you brought so many item from amazon
on monthly basis this card made for you must buy
amazon co-branded card
Or you frequent traveler card give you some
discounts offer on flights ticket, or , extra baggage
allowance and free lounge access.if You have a lot
points you can redeem hare for free flights.
Some co-branded cards include Maruti Suzuki
NEXA Bank AllMiles (car-related privileges),
Platinum Times Card (discounts on entertainment),
and Snapdeal axis Bank Card (online benefits
Cashback Credit Cards Moneyback or CashBack Cards allow you
to earn cash back on your everyday spends. These cash back are in
the form of rewards which you can use to settle the outstanding
amount on your Credit Card. In addition to cash back, you also
receive benefits such as shopping and dining discounts. Platinum
Edge and MoneyBack are examples of cashback cards.
Across these different types of cards, some features are common.
These include smart bill payments, fuel surcharge waivers,
interest-free credit, zero liability after reporting lost or stolen card
and EMV chips for security.

5. Business and commercial credit card

6. Premium credit card - it refers to those card which are

relevant for high income group when your income increase
then it will upgrade to premium you regular card to premium
card it will give some extra benefits in compare with you
regular card it also give you higher credit limit and provides
free lounge access at airport
 these are some premium credit card
1. Kotak delight Essentia Platinum Credit Card
2. Sbi elite
3.

7. Contactless Credit Card

Entertainment Cards-
If you’re Entertainment seeker and you can’t stop yourself to
feed your entertainment needs every weekend then entertainment
cards its made for you its is specific Designed for to give
entertainment offers to the cardholder like discounts on tickets
bookings for events, shows, concerts, and offers like buy
. Cardholders can also earn reward points and cash back offers
on these transactions and redeem them for several other
benefits.
Some of the cards are
–> HDFC Titanium Times Credit Card
–> Kotak PVR Gold Movies Credit Card
Kotak PVR Platinum Credit Card
7.Credit Cards for Women

8.Gold credit cards

9.Platinum credit cards

10. Lifestyle cards

11.Premium/Signature credit cards WORLD MASTERCARD

Here you get discount on fuel surcharge at all fuel station and access to
premium airport lounges. There is 2 rewards points on Rs 150/- spent. Fuel
Surcharge waiver capped at Rs 250/- and complimentary access to Airport
Lounge.

DINERS CLUB PREMIUM

You get unlimited access to domestic lounge. 4 reward points on every Rs
150/- spent and unlimited golf classes. Moreover you earn Rs 6000/- E
Vouchers for every 1000 rewards points. Plus redeem for airline tickets,
hotels and movie tickets.

DINERS CLUB REWARDZ

Here only 3 reward points for every Rs 150/- spent. Exclusive 24 X 7
concierge for booking.

VISA SIGNATURE
Only 2 reward

12.Titanium credit cards

13.Silver credit cards

14. Prepaid credit cards

15.Travel credit cards-Travel Cards
An avid traveller? Think of travel cards that offer miles on travel spends while also
letting you chill at both domestic and international airport lounges. The miles
earned can be redeemed for ticket and hotel booking. Don’t wait, just choose from
any of these credit cards and apply for the one you think would be the best in your
case.

 Air India SBI Signature Credit Card

 CITI PREMIERMILES Card
 Jet Privilege HDFC Bank World Card
 Jet Airways ICICI Bank Sapphiro Credit Card
 American Express Platinum Travel Credit Card

16. Lifestyle cards-