What is a Credit Card – Let’s know what a credit card is, what are the advantages of a credit card, how it works, etc. A credit card is a type of credit card used to make purchases and pay bills. Easily credit card bills can be paid within a fixed time frame.
Credit cards are used by many people in today’s era, but some people don’t have any special knowledge about credit cards. If you are one of those people then don’t worry as this article will give you all the credit card related information you will enjoy reading this article.
What is a credit card?
A credit card is a financial instrument issued by banks, it is a thin plastic card with a predetermined credit limit. Credit cards help you make cashless transactions, with your card issuer setting a credit limit based on your credit score, credit history and your income. Credit card means a loan account, if you don’t have money you can shop with your credit card, and later at the end of the month you can pay off your credit card bill.
What is the difference between a credit card and a debit card?
The main difference between a credit card and a debit card is that when you swipe a debit card, the money is directly debited from your bank account, whereas when you make a purchase with a credit card, the pre-approved amount is deducted. In the case of a debit card, the account holder can directly access the savings account to view expenses, as a debit card is linked to your savings account, while a credit card is linked to your financial institution or issuer. is connected to the bank.
What are the advantages of credit cards?
Credit card is very useful in case of emergency, bank account overdraft or during loan processing, credit card is very useful option. If you spend money on your credit card and make payments on time, your credit score can improve, which will be helpful in the long run, especially when you apply for business or personal loans. Paying online can be risky in case of debit cards as debit cards can take all the money from your bank account at once and it can take a long time to get it back but credit cards have the capability to charge. All possibilities are there. it happens. If you regularly spend money on your credit card, it is also much easier to calculate the amount.
How many types of credit cards are there?
Credit cards can be used for all needs from shopping to paying electricity bills. Following are the types of credit cards in India. Travel Credit Card – With the help of this credit card, you can get discounts on all airline ticket bookings, taxi bookings, train and bus ticket bookings and many other services. Every time you book a ticket, you earn some points that you can later redeem.
Credit Cards for Purchases – If you want to get discounts on purchases or transactions, with this type of credit you can shop online or offline at partner stores, through which you can get cashback, discounts are Coupons are also available.
Balance Transfer Credit Card – This credit card helps you avoid high interest or penalties by allowing you to pay off your existing credit card debt. For that, you get 6-21 months with a balance transfer credit card. However, to use it, you must also pay a balance transfer fee, which can reach 5% of the total amount.
Fuel Credit Card – By obtaining exemption from the fuel supplement with this credit card, you can benefit from discounts on offers at petrol stations. Plus, you can save a lot of money throughout the year by accumulating extra points.
How does a credit card work?
On what basis do banks issue credit cards? A bank gives you a credit card only when you are able to repay the loan amount taken from the bank. The issuing bank sets the credit limit based on your credit score, credit history and your income. Get 60 days to pay – If you don’t pay your credit card bill on time, you’ll be charged a penalty, leaving you 50-60 days in debt between your credit card bill and your purchases.
With the credit card, you can make any kind of payment such as paying bills, booking bus ticket, booking train ticket, paying fees, etc. through online payment. You get bonus rewards when you pay with a credit card. Points will be earned, gift cards will also be awarded. Sometimes you are paying too much interest on your credit card minimum payment, if you look carefully you are paying the minimum but the principal doesn’t work. If you pay the minimum amount due, you will have to pay 2-4% interest on the balance.
If you fail to pay with your credit card, you will be declared in default, your credit card will be blocked and the bank may take legal action against you for non-payment of credit card bills. So friends, did you like our article, through this article we get to know what a credit card is, in this article we have given you detailed information about credit cards.