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In India, A Card runs 5 crore people lives. Credit Card.

Credit cards is issued to by financial institutions (mostly banks), they offer money that needs to be repaid within a stipulated time. Not everyone gets credit card or eligible to get credit card. Credit card is issued to person who has source of income. Credit cards to make payments and keep a record of your purchases online.  All you need to do is swipe your credit cards online or at stores.  Many also use these cards to pay monthly bills, insurance premiums etc.

Credit card not for everyone. It is for person who has source of income.

Credit card is money loaded with certain limit based on your income. If you are earning monthly 1 Lakhs rupees, your credit card limit would be 1-2 lakhs. You can spend up to your limit and pay within stipulated time such as 30 days or 40 days. This time varies based on credit card issuing financial institutions. In simple term, it is kind of loan with pre approval of certain limit. It can be easily accessible to you in emergency, hospitals accepts credit cards.

Credit cards help in emergency.  Provides supports in emergency situation.

How to apply credit cards? If you are working professional or government employee, just submitting proof for your income and address proof are sufficient to get the credit card. To apply for credit card,call the credit card representative or register for credit card enquiry in financial institutions website. Popular credit cards issuing banks are ICICI, HDFC, SBI, Standard Chartered ,citibank, and American express. They provides different kind of card such as VISA and MasterCard (AMEX/JCB/CUP/RuPay) are Card schemes which help in fund transfer and transaction between different financial entities.

Benefit of Credit Card:

1) Cash back: Indian government encourages to go as “cashless” economy.  So you use your card to pay monthly bills (electricity, broadband, mobile) or for grocery purchases. Besides, online shopping portals too have cash back offers on various products. Festivals seasons,we may get cash back offer on our spending. Recently flipkart and amazon provided 10% cashback on SBI credit cards.

2) Reward points: Credit cards companies offer reward points for any purchases you make with your card. For example, HDFC Bank gives 2-5 reward points for every Rs 150 spent using your card. You can then use these points to purchase gifts or get as money based on reward points.

3) EMIs: If you are buying for more than 5000 rupees, you can easily convert it to affordable monthly instalments. Banks usually charge interest for conversion to EMIs. It is easy to buy electronics or mobile in monthly EMI. Sometimes we may get interest free EMI offers.

4) Grace period: One of the main advantages of using a Credit cards is you can defer your payments till your bill your due. Banks offer a maximum 50-day grace period for paying back your dues.

5) Safety: Credit cards are safer than debit cards as in case of fraud you are not out of money immediately. Payment gateways like Visa, Mastercard also offer additional password protection while using the cards online.

6) Immediate Access: Credit can help with an expensive, unexpected emergency and give you the flexibility to pay it over time.

7) To get Cash: Recently money mobile wallet available in india. We can transfer money from credit card to mobile wallet such as PayTM, MobiKwik,PayUMoney and FreeCharge. Transaction fee will be collected for money transaction from credit card to mobile wallet. So in emergency cash needs, we can use credit card to get hot cash.

8). Use Everywhere : Credit cards are accepted at more places than checks, and they’re generally faster to use.

9). Credit card Payment : Bills can be paid consolidating several payments into a single lump sum by internet banking or in respective bank branches. It is easy to payback the credit card payment.

10). Monthly Statements: Credit card companies would send monthly statement of credit card usage and money paid towards payment. Financial charges and late fees if any.

We have discussed on credit card basics, eligibility to get credit card, how to apply for credit card and benefit of credit cards. Let us discuss more on credit card and disadvantages of credit card in upcoming posts. Handling and managing credit card is important in personal finance and investment planning. Happy Spending !!