Credit - Card

About Credit Card

Credit cards, also known as plastic money, provides an alternative to cash, for payments of different purchases made in stores. This remains one of the most popular forms of payment for consumer goods and services. Credit cards are an important constituent of electronic commerce and internet commerce and a suitable substitute for cash or check. It is a standard-size plastic token, with a magnetic stripe that holds a machine-readable code.

Credit card is issued by a financial company or bank which has agreements with various merchants to accept their cards. It permits the cardholders to borrow funds for payment of goods and amenities given that the cardholders return back the original amount along with previously agreed upon additional charges.

According to the cardholder’s credit rating the borrowing limits are pre-set. The bank also grants a line of credit to the user which are generally used for borrowing money in form of cash advances. The users receive a monthly bill, based on purchases and usage of the card, that can be paid off before the due date to avoid additional interest for using the credit.

Add-On Credit Card

A supplementary credit card issued under the primary card is known as Add-on cards. There are limited number of add-ons that can be issued and these are generally for the family members of the primary cardholder. These cards are issued by most banks under the primary cards for free, nonetheless, some banks have a small fee applicable for issuing the cards. However, an important point to remember is that overall credit reports are directed on the primary account for the payment of dues. If any payments are not made by the due date, then it will be liability of the primary cardholder to pay along with the late charges and applicable interest.

Benefits of Credit Card

The user can enjoy loads of benefits, such as short-term, zero-interest loan for every purchase in India as well as in foreign countries.

It helps building the cardholder’s credit history which subsequently helps in forming the withdrawal limits.

There is a benefit of cash advances with credit cards, which implies that the users are able to withdraw cash from ATMs at any time of the day.

Reward or bonus points are added to the users account every time they swipe a card. Accumulation of certain amount of these points will help avail benefits from bank.

A grace period or additional days are given to a cardholder to clear the bill payments without incurring any interest. However, delayed payment results in additional fee charges. Also, there are no grace periods for cash advances taken through the card.

EMI facilities can also be availed on a credit card by fulfilling a minimum transaction amount. The credit card purchases can also be converted into EMIs.

Lost card liability or insurance protects the cardholders against fake transactions. This insurance is offered for up to 48 hours prior to reporting to loss of card.

All transaction records are maintained in the same statement which helps the cardholder in easy tracking.

Types of Credit Card

Regular Cards:

These are the most basic of all credit cards with a low credit limit and a basic stature among other types of cards. Usually these cards are clubbed with various reward programs to attract customers.

Silver Cards:

These cards have higher credit limits and higher benefits than the regular cards. The main features include:

    • Low membership fees
    • High-salaried income is not mandatory for an applicant to be eligible for a silver car
    • If the cardholder has a good credit card history, the limit provided for transaction is made equal to that of other credit cards
    • In case the account balance is transferred from one credit to another, the applicable interest rate is 0% for initial 6-9 months

Gold Cards:

These cardholders enjoy a higher credit limit and have higher eligibility criteria. Its main features include:

 
    • Higher cash withdrawal limit and credit limits
    • It can take one Add-on card
    • It provides travel insurance, reward points, cashback offers, etc.

Platinum Cards:

These cards are designed for high net-worth individual and provides best rewards. These often have high joining and annual fees.

International Cards:

These cards help in overseas transactions without worrying about carrying cash during travels.

Student Cards:

These are only for students who are 18 years or older and enrolled in full time education at an university.

Balance Transfer Cards:

These cards allow to transfer the outstanding balance in an account to an account held at another credit card company. They also offer interest free time periods.

Kisan Cards:

These are a new addition provided to farmers in India so that they get access to credit at preferred interest rates.

Top 10 Credit Cards in India

Credit Card Eligibility Criteria & Required (Common)Documents

Eligibility Criteria Loan eligibility criteria differ for each banks/lender but applicants age should not be more than 70 years at the time of loan maturity

Common Documents List

Top Credit Card Providers

  • State Bank Of India
  • Bank Of India
  • Punjab National Bank
  •  Bank of Baroda
  • Indian Bank
  • United Bank of India
  • PNB, Central Bank of India
  • HDFC Bank Credit Card
  • ICICI Bank Credit Card
  • City Bank Credit Card
  • Axis Bank Credit Card

Credit Cards Frequently Asked Questions (FAQs)

There are various types of credit cards made specifically for particular individuals. The type of transaction one does vary from another, therefore to ease the transactions the banks have developed various credit cards.

  • Standard Credit Card  It is the simplest type of credit card for the individuals who do need a card which is simple to understand. These cards do not provide any rewards points on the transaction and have a specific limit. 
  • Silver Credit Card: This is good for a salaried individual with a good credit score and 4-5 years’ work experience. It has a low membership fee and no interest charged for the first 9 months.
  • Gold Credit Card: It has high withdrawal limit, high credit limit. The card also has added on card facility for the spouse, parents, and children of the cardholder. It has various cashback offers and reward programs.
  • Titanium Credit card: It has a special titanium reward program that offers higher reward points and various other attractive points. 

The Gold, Silver and classic cards are the types of cards issued by the banks for the purpose of transactions at ATM and Mercantile. Each card has different features such as withdraw limit, maintenance charge, Issuance charge, reward points, and cashback benefits. As per the plan of State Bank of India, the Silver card can be used for a daily maximum transaction of Rs.40,000 and the annual maintenance charges of Rs.150 + taxes are applicable. The Gold card issued by the SBI offers a daily maximum ATM Transaction of Rs.50,000 + various other annual charges. The SBI Classic card issued by the SBI has a maximum daily ATM transaction limit of Rs. 20,000 only.

CVV number is the unique number that serves as additional security for nonphysical purchases such as the internet or online shopping. For transaction where the card is swiped the CVV number is not required. It is printed at the back of the Credit Card and is one of the mandatory verification when using the card for online transactions such as E-Wallet, window shopping, online payment, etc. All the cards have these CVV numbers printed on its back irrespective whether it is a Debit card or Credit card.

The applicants who meet the eligibility criteria can fill the application form through online or by personally visiting the nearest branch of the bank. The applicants who applied online are supposed to get their documents such as Identity Proof, Address proof, PAN card, and Income proof. The applicant is expected to visit the branch to verify the document but many banks also offer doorstep service where the representative from the bank visits the house to verify the details provided by the applicant. Many times the banks to advertise their services install stalls at shopping malls, metro, railway stations, and airports. The interested individuals can also apply to these stalls for the credit card. 

Credit card is a kind of unsecured credit and therefore the issuers have to properly verify the documents and creditworthiness of the applicant before the card can be issued. To check the worthiness the credit score of the applicant is calculated. Credit score indicated the risk the lender has to take when the money is borrowed. Higher the credit score more is the chance of approval of the application. 

The following individuals are eligible for getting a credit card as per the recent eligibility criteria of State Bank of India:

  • The applicant must have attained the age of 21 years.
  • If the applicant is for the add-on card he must be above 18 years of age.
  • The applicant must be an earning individual such as a salaried, self-employed, retired pensioner. Even a student can be held eligible for a credit card if they meet the eligibility criteria of the bank. 
  • One of the general eligibility criteria for applying Credit card is that the applicant must be a resident of India. 
  • Students can be eligible only if he furnishes PAN Card, KYC compliant documents, Age proof and proof of college enrolment.

The minimum salary criteria differ for different banks in India as well as outside India. The followings are the minimum salary required for the salaried individual for applying for a credit card:

  • SBI Credit Card: – The minimum income required for the applicant to be eligible for SBI credit card is INR 20,000 per month. 
  • Canara Bank Credit card: – The minimum income that the candidate must earn for being eligible for Canara bank Credit Card is 1 lakh rupee per annum.  
  • RBL Bank Credit Card: – The applicant who is salaried must be earning a minimum of Rs. 25,000 per month to be eligible for Credit Card. The applicants who are self-employed must have a minimum of Rs. 15 Lakh gross annual income. 
  • Kotek Mahindra Bank: – The minimum income which the individual must be earning to be eligible for applying for Kotek Mahindra Bank Credit Card is INR 3, 00,000 per Annum.

The exact time required for the verifying and approval of the credit card varies from bank to bank. Generally, it takes 7-15 days for the completion of the entire process which includes verifying the CIBIL score, income proofs, and KYC documents. The above mentioned time does not include the time taken for delivery to the credit card. 

The first step the cardholder should take after their card is stolen is to inform the issuing bank and get their card blocked. The main reason to get the card blocked instantly is that it may lead to unauthorized transactions and involvement in illegal activities. The Credit card issuing banks provides proper guidelines that the cardholder should follow in case the card is lost or stolen. With the development in technology, the banks have started to involve various technologies to report lost credit card and get it blocked. State bank of India allows its customers to block their credit card through SBI Official website, SBI mobile App and IVR (Toll-free SBI Card helpline). 

Once the lost/stolen Credit card is blocked the blocked card cannot be used for transaction anymore and the cardholder can opt for another card.

Credit card reward points are the small rewards that the cardholder gets on each transaction. The card company earns interchange fee from the merchant outlet whenever the card of their company is used for any transaction. This fee varies from 1% to 2.5% and the interchange fee is lower if the transaction is more frequent. The banks also earn from interest earned and annual charges for the card. The banks offer high reward points to its customer to attract more customers. The Credit card reward points can be redeemed through the official Application or website of the bank.  SBI offers its reward points to be redeemed against Gift Vouchers and Cash through website or SBI card mobile app.

PIN stands for Personal Identification Number is a 4 digit unique numeric code that allotted to the cardholder by the bank. It is to ensure the authentic use of the credit card. It is the code that the cardholder must insert every time he uses the credit card for transaction. The PIN shall not be shared with anyone else except the cardholder.

In case if the cardholder forgets his assigned PIN, the cardholder will have to request for the new PIN from the issuing bank. The banks provide various online and offline facilities for the card owner to generate the PIN. The State bank of India credit cardholders can generate the PIN at nearest SBI ATM through registered mobile or through Net Banking.

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