The Complete Guide on Credit Cards
What is Credit Card?
Credit Cards are issued by banks that allow the users to borrow money from banks so they can purchase whatever they want. It could be bought online or offline but the amount has to be paid back later in the form of credit card payment. If the amount is paid back before the next billing cycle starts, then one does not have to pay anything extra and nor is there any need to carry cash around.
How to Apply for a Credit Card?
To apply for credit cards, one has to make the application either online or offline. To make offline applications, one could simply visit the branch of the bank they want to get their credit cards from and fill out a form. Certain documents would also be required. On the other hand, one could also apply online by visiting the official website of the bank and apply through their credit card portal. The websites have all the information regarding the card and the users are able to make an informed decision. Credit card apply online is very simple and can be done from anywhere. However, the documents would still have to be submitted at the final stages of verification and then the applicant would be duly informed if they have been approved or not.
Today, online credit card payment is the norm. The card is linked to the bank account and the bill payments can be done online. Almost all the banks provide credit cards now and some of the best credit cards today are Citibank, American Express, Standard Chartered, ICICI Bank, HDFC among others. Credit card payments are best done on time and according to the billing cycle to avoid paying extra by accruing interests.
To apply for a credit card, one has to check the credit card eligibility. It has to be said that different banks have different eligibility requirements but almost all the banks look for a stable income and a good CIBIL score. It is important for them to ascertain that the applicant is good with his finances and that he would not miss out on his bill payments. Also, most banks do not let applicants below the age of 20 years apply. Applicants must be residents of India and special NRI cards are issued if anyone is settled abroad. It is important to have a fixed salary but self employed individuals might also avail the cards by producing their income proof. Even within the same bank, the eligibility criteria would vary depending on the category of the card one has opted for. The credit card application status can also be checked online through the bank website.
There are also a few documents required for credit card application and without them the application would not be approved. Almost all the banks ask for KYC documents that includes Photo ID and Age Proof, Address Proof and the IT returns for the last three consecutive years, which is the same for all. For salaried people, one would have to provide the salary slip of the last six months and the bank statement of the last three months. Those who are self employed or have their business will have to provide the TAN as a business proof, along with sales tax documents. Apart from these, the banks could ask for any other documents as per their requirements.
How to use a Credit Card?
A credit card has truly revolutionized the financial world in every sense of the term It can be used to make life so much easier and all one has to do is swipe the card at merchant establishments anywhere in the world. They can be used to pay for travel, dining, entertainment, and work and the card identifies the user through the unique credit card number. Credit cards work on the principal of credit, meaning, the bank is loaning the money to the card user to make his purchases. Since, unlike a debit card, the money is not debited from one’s own account, it is very easy to get carried away and splurge. Later, when the bills arrive and they are too much to be paid in one go, before the next billing cycle, interest is slowly levied on those cards and once starts paying more. This is something to be mindful of while applying for a credit card.
What are the benefits of using a credit card?
However, credit card benefits are also truly immense and this is why most people opt for them in the first place. The biggest advantage is the redemption of points that could be used later for a plethora of services and benefits. The benefits are mostly exclusive and it would be otherwise quite impossible or too expensive to avail them by themselves. Be it dining at five star boutique hotels, getting access to celebrity rated golf courses or flying business class at discounted rates, these are just some the benefits to name a few and the surface has not even been scratched. There are also accidental insurance to be claimed and baggage insurance to be covered. Frequent flyers can also get free airmiles and this adds up to saving quite a lot in the long run. There are balance transfer options, fuel surcharge waiver option, cashback benefits, airport lounge access and much more. Most banks offer the option of converting their payments into easy EMIs and this makes it easier for the customers to keep on making their payments regularly, especially when there has been an expensive purchase. There are also interest free periods of 20 to 50 days and the loyalty programs are what most clients look forward to.
There are various types of credit cards and the various categories are Shopping, Lifestyle, Travel, Dining and Entertainment. The various banks have their own categorization like Classic. Gold or Platinum, depending on the number of benefits they come with. There are special benefits given to women card holder and senior citizen card holders at times and this has enabled a large section of the population to opt for credit cards.