6 minsSeptember 08, 2017
Among the many customs and trends that have changed over the last few years in India, credit card usage probably ranks very high.
Traditionally, we have been quite averse to buying on any kind of credit. Now, however, everyone wishes to hold at least one credit card. This is largely because of the offers and facilities offered by credit card companies.
It is possible to apply for a credit card online with just a few clicks and you are there. Once you can apply online and request a call-back, you do not need to visit a bank branch physically.
Also, credit cards are custom made as per the spending habits of the card-holders. For example, Axis Bank offers Axis Bank Buzz Credit Card especially for the online shoppers and Axis Bank Vistara Infinite Credit Card for someone
who enjoys travelling business class.
Credit card, as we all know, is plastic money which allows us to buy goods and services without having to pay for them immediately at the time of purchase. This factor makes credit cards desirable to and card-holders get a 40-50 day window to
repay that amount of credit due and make the best of the cash-back and reward points facilities the company provided.
Let us look at the benefits of owning and transacting with credit card:
- Interest Free Period
- When you transact or purchase anything using a credit card, you get to spend that money without any interest charges for 40-50 days. This period is also called as the credit period or cycle. The credit amount is available to you without
any interest fee.
- EMI Facility
- If you are making high value purchases and unable to repay the credit, you can convert your credit loan into Equated Monthly Instalments (EMI). With the extended credit facility, you can buy a product anytime and choose to pay in instalments
as per your convenience.
- Withdraw Cash
- Credit cards also facilitate you with cash withdrawal when in need. This facility is extremely useful in times of emergency such as medical or financial. You can withdraw upto 30% of your credit limit at Visa ATMs. And with 18,000
ATMs of Axis Bank that display Visa sign across India, such cash withdrawal is accessible around the-clock, 365 days a year.
- Auto Debit facility
- IIf you fear missing out the due date and subsequent heavy charges of a late payment fee; these credit card companies also offer an auto-debit facility. This allows you to set a date in advance and the amount will be deducted automatically.
You can link your savings account with the credit card to make this automated payment. You would also have an option of the total amount due and minimum amount due depending upon the terms and conditions.
- Cash-back facility
- Another benefit that many credit card companies offer is cash-back facility. And sometimes, especially during festive times when you wish to pamper yourself a bit, cash-backs can prove valuable and wanting, plus facilitate savings.
The cash-back offers are available on purchases such as flight tickets, movie tickets, utility bills, and much much more!
Now that you know the benefits of holding a credit card, here are 5 basic concepts of credit card you must know…
- Credit limit
- You see, this amount is the maximum amount you are allowed to spend on your credit card. Before you use your card, it is vital to know the credit limit. If you are a first time card user or an avid spender, it is better that you opt
for a card which falls within your means. Your credit limit is decided by you and your bank. Factors such as your monthly income, your credit score,
and credit history are taken into consideration before your credit limit has been decided.
- Interest rates
- Credit cards offer a facility wherein you need not pay the full amount due every month, and only pay the minimum amount. However, the outstanding due is charged a specific interest. Hence, check the interest rate applicable on your
card, if you are likely to prolong your payments.
- Grace period
- Grace period is the extra time provided by the bank to pay your outstanding dues without any interest charges. Longer the grace period, more beneficial it is for you, the credit card holder.
- Rewards and incentives
- Some cards offer reward points or incentives when you make a purchase and these can be redeemed or used at a later
date. Analyse your spending habits and find out if this type of card can be of any advantage to you. If so, choose a card that suits you the best. For instance, some credit cards allow you to redeem reward points at some apparel
stores or specific shopping centres. If these places are where you prefer shopping from, then choose and use the credit cards with these benefits. If you have a favourite multiplex, consider cards which give you similar benefits
and facilitate savings.
- For instance, Axis Bank Signature Credit Card, issued by Axis Bank offers exciting
and rewarding offers on entertainment and other lifestyle purchases.
- Terms and conditions
- Apart from all of the above, it is also imperative to read the fine print of the terms & conditions. If you find anything in the terms and conditions of the card that is not conveyed to you or is contrary to what was conveyed to
you, do seek a clarification from the bank.
- Do you fear that your application might get rejected due to your poor credit history, credit score, or low income? Don’t worry, you can opt for credit even then…
- The Insta Easy Credit Card offered by the Axis Bank will be the best option for you. Yes,
just like instant noodles, you can now get a credit card over the counter.
- Technically speaking, a credit card is an unsecured loan. This means that unlike a secured loan, which is advanced by a bank/financial institution against security like property, for instance, a credit card is offered without any security.
- An insta-credit card is a secured loan. If the borrower fails to repay his/her principal/interest commitment, the security obtained before issuing the insta-credit card can be utilized as compensation. In an unsecured loan, like a credit card, that is not possible. Hence, banks take necessary steps to ensure that only those meeting certain parameters are qualified to acquire a credit card.
- Some features of insta-credit card are:
Hence, this card is suitable for those having an irregular income, less or no credit history, and/or poor credit score.
- It is a secured line of credit issued against your fixed deposit
- It involves minimum paper work and is issued instantly over the counter
- Annual fee is not applicable or very low
- Interest charge is comparatively low
One of the biggest benefits is the no minimum income criteria. You are granted the card against the fixed deposit you hold with the bank.
- Under normal circumstances the following basic documents to obtain a credit card:
- PAN card photocopy or Form 60
- 2 photographs
- Latest payslip /Form 16/IT return copy as proof of income
- Residence proof (Passport, Aadhaar, Driving License, Ration Card, Electricity bill, Landline telephone bill
- Identity proof (Passport, Driving License, Aadhaar, PAN, Election Card)
So opt in for you credit card soon and avail exciting cash-back offers, discounts, reward points and many more privileges.
Disclaimer: This article has been authored by PersonalFN, a Mumbai based Financial Planning and Mutual Fund research firm known for offering unbiased and honest opinion on investing. Axis bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.