What is credit card?
Credit cards are an essential part of financial transactions in advanced economies. Credit cards are increasingly popular in many developing economies, such as India, due to their ease of use. You can buy anything from jewellery to food with a credit card. With a credit card, you don’t always have to have cash with you to shop. It’s a more convenient payment method.
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How are credit cards functioning?
A credit card does not mean you have more money, it simply means that you have more time to buy. With a credit card, you change the manner in which you pay for your purchases. Whenever you buy on your credit card, you actually borrow this money from the issuer of the credit card until you repay it at the end of a month.
What’s the balance of the credit card and when do I pay my credit card interest?
If you pay your bill on a monthly basis and in full, you don’t have to pay interest on the money you spend on buying. If you repay them in time at the end of the monthly billing cycle, the credit card company allows you to use their money that month’ free.’ However, if a partial payment is made, the issuer will charge interest for the remaining amount–or balance–to be transferred to the bill of next month.
For example, if you will incur no charge for using your issuer’s credit money if you make purchases worth 20,000 rs and pay the full amount when you receive your credit card bill at the end of this month. However, if you pay only Rs. 12 000, you will be charged the remaining Rs. 6 000 in next month’s bill.
Eligibility Criteria
Credit Card is one of the best means for the overall cashless transactions. There is no any need to carry the cash always with you and it also saves you to obtain the money debited at the time of purchase. On the other side of the flip, there is a list of benefits including the discounts on shopping and traveling etc. The eligibility for the credit cards totally a different one and the major purpose for which the card is accounted. The applicant should be at least eighteen years old and should be either salaried or self-employed in order to pay the credit card bills.
He/she should have a proper savings account in the concerned name and there should not be any bad credit history. Generally, the credit card eligibility depends on several factors such as the purpose of the card, the location of residence, currently employed as salaried and self-employed professional business etc.
Charges and Fees
The folks should be more careful when they use their credit cards. There are several ways where a person can incur charges. An introductory rate is given the first time when the card is given for the first time. This rate won’t cover any of the cash withdrawals. It is important to check the interest rate in the initial period and also make sure that repayment is done successfully