FAQ of Credit Card, Credit Cards, CreditCards at Bank Loan India

What is a credit card?
A credit card can be called plastic money used to pay for products and services at over 20 million locations around the world. All you need to do is produce the card and sign a charge slip to pay for your purchases. The institution, which issued the card to you, makes the payment to the outlet on your behalf and would be reimbursed at a later date by you.
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There are how many types of credit cards ?
Essentially, there are only three cards, which are available, Visa, Master Card and Amex. Various participating banks like Citibank or Standard Chartered then issue these cards to end-users.
Visa and Master Card are the most popular cards in India and have an almost equal market share. Amex is relatively new in India and issues its cards only through The American Express Bank
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What is the minimum salary required for taking a credit card?
You need a salary of at least Rs. 75,000 per annum for an ordinary card and Rs. 1,50,000 per annum for a gold card.
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What is the difference between a credit card, charge card and debit card?
A credit card allows you to pay for service or product over a period of time. The first 45 to 50 days of credit (calculated from the day of billing and not from date of purchase) come interest free. You can chose to pay your entire dues at one go, or staggered them after paying the minimum amount due every month.
A charge card works on similar lines as the credit card with one difference. With a charge card you have to pay the entire dues within the credit period. You cannot carry over any balances like a credit card.
A debit card enables you to access your bank deposits for payment. When you make any purchases using a debit card, then your bank account is automatically and instantaneously depleted to the extent of the purchase amount.
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What are MasterCard and Visa ?
MasterCard and Visa are global non-profit organisations dedicated to promote the growth of the card business across the world. They have built a vast network of merchant establishments so that customers world-wide may use their respective credit cards to make various purchases. They also develop various technologies that are required for running the credit card business.
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What is a Global Card?
A Global Card enables you to use your credit card when you are overseas. You can spend in dollars or any other foreign currency and settle the dues in your local currency.
Your credit limit is based on the basic travel quota (BTQ) entitlement, and if this more than your assessed credit limit, you could buy traveler's cheques.
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Why should I own a credit card?
Credit cards are relatively safer than carrying cash. You can spend anywhere, any time. Now days you can also issue cheques against your card limit and order drafts over the phone. Credit card enables you to other benefit like discount at shops and restaurants airline tickets and insurance cover. Most credit cards also offer personal accident cover. You get interest free money for 45 to 50 days. A global card assures you of spending in any currency and settling dues in home currency.
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What should I do if my credit card is lost or stolen?
In the event of losing your credit card, you must inform the bank immediately. The bank ten deactivates your card to prevent any fraud. You are protected from settling any expenses on your card the moment you inform the bank.
Before you report the loss of your card, you will have to pay for all the purchases fraudulently made on your card. After reporting the loss, your liability is mostly restricted to Rs. 1,000. You may also have to pay for the reporting of the loss in the lost card list. Besides this, you will be expected to pay for the issue of a replacement card.
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What are the eligibility norms to get your own credit card?
To apply for a credit card, you need:
To be at least 21 years of age and not more than 65 years.
A regular and steady source of income.
Credit card companies (or issuing banks, as they are known) have a requirement of a minimum income level, which serves as the starting point while applying for a card. This requirement varies from bank to bank and could vary between Rs 60,000 per annum to Rs 150,000 per annum depending upon your risk profile and the type of card you choose. Typically, banks issuing credit cards need to be sure whether or not you will be able to repay the expenses incurred through your credit card.
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What does the purchase protection feature of credit cards mean?
The purchase protection feature automatically insures all items bought on the credit card from damage or loss due to fire or theft up to a certain sum of money.
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What is a credit shield?
The credit shield is a feature allowed by credit card banks which provides a waiver of payments of outstanding on your card up to a certain limit in the event of an accidental death.
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What is a supplementary/add-on card?
An add-on card is usually for your dependents - spouse, parents or children. Any additional cards under this head come at a fee, which varies between Rs 125 to Rs 1,000. All expenses on the card are billed to you. A disadvantage is that your credit limit gets divided between the main card and add-on cards since an add-on card does not get additional credit limit.
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Do I have to pay interest whenever I borrow?
No. Herein lies the beauty of owning a credit card.
Credit card issuing banks offer you an interest-free period of 40-50 days, after which the payment has to be made on purchases made against your credit card.
You also have the choice of carry forwarding your out standings by the payment of a 'minimum due amount' (generally 5% of the outstanding).
If you pay off the entire amount within the interest-free period, then no charges are due. However if you choose to avail of the credit facility, then a credit charge is levied which generally varies between 2.5% to 3%.
It should be noted that though the notional interest free period is for 40-50 days, billing is done monthly, so the actual interest free period could vary depending on whether the purchase was made at the start or the end of the billing period.
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What is the entrance fee for a credit card?
The entrance fee is payable on acceptance of your application for a new credit card. This fee varies between Rs 100 to Rs 400 depending upon the issuing bank and the type of card requested. More often than not, this fee is waived.
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What is my liability when I lose my credit card?
In the event that you lose your credit card or it is stolen, then you must inform the bank immediately. The bank then deactivates your credit card to prevent any fraud. The lost card liability fee is payable on the expenses incurred during the period between the loss of your card and your having reported it to the bank. The lost liability fee is restricted to a maximum sum of Rs 1,000 in the case of most credit cards issuing banks.
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How are the fees levied when I delay my repayments?
Late payment fees, as the term indicates are payable in he event of any delay in repayment of the out standings on your credit card after the stipulated 'interest-free period'. These charges are very steep and card members are well advised to pay off at least the minimum amount due on out standings every month.
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Can I use credit cards to make payments on the phone/ net/ Internet/ mail order in India?
Yes, payments over the Internet using a credit card is permitted. When you do purchase a product over the phone, over the Internet, or by mail order, you need to be careful about recording details of the order, and reporting any inconsistencies in billing to the card-issuing institution immediately.
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Will the merchant establishment charge a service charge for using a credit card?
The answer is no. However, with specific transactions like railway bookings they might demand a service charge of 2-3%. Before using a credit card check whether any service charge is applicable. Also, in some countries/states there could be an extra service tax applicable for transactions paid through a credit card.
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What does rolling over credit/ revolving credit mean?
You have two choices for making card payments. You may clear your dues as soon as you receive your billing statement, in one shot. Or you may choose to pay the minimum monthly installment mentioned on the statement (which is usually between 5-10 percent of the total amount outstanding as on the date of the statement) and avail of revolving credit on thebalance. In other words your credit amount rolls over to the next month and so on. In a majority of cases, interest will be calculated on the average daily balance method on the unpaid balance plus amounts incurred for new purchases. Average daily balance depends usually on the amount outstanding and the number of days it is outstanding for.
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