About Credit Card
With digitization of payments is taking over across the nation, it is no longer practicleto carry a thick stack of bank notes and rolls of coins in one's wallet With respect to the current scenario, credit cards, also known as plastic money, provide a viable alternative and their use is also on the rise. Apart from providing much needed alternative to cash, credit cards also reward you for expenses made using them. As a result of the huge demand for plastic currency, there are a plenty of options available from leading banks.
There are a host of credit cards available in the market having different features and benefits linked to them. The most popular credit cards on the offer include, entertainment credit cards, fuel credit cards, co-branded credit cards, cash-back credit cards, student credit cards, women credit cards, travel credit cards, lifetime free credit cards, premium credit cards Business credit card, Global credit card and low interest credit cards.
Step 1: Choose the purpose of the card. All credit cards have different benefits and reward programs offered. Choosing the purpose of the card will help us show you the most relevant credit cards available.
Step 2: Select your city of residence. There are many banks that offer specific cards and schemes for specific cities.
Step 3: Select employment. The next step includes specifying whether you are salaried or self-employed.
Step 4: Employer name (enter slowly to allow for auto fill).
Step 5: Enter your gross monthly income to confirm eligibility.
Step 6: Specify if you already own a credit card. If you do not have a credit card, you will have to tell if you have taken a loan previously. This is to check your credit history. If you already have a credit card, you will have to mention the bank which has provided your card.
Step 7: Pick the bank that you have your salary account with, or if you are paid via cheque or cash.
Step 8: The next step is to fill in your personal details including your pin code, name, gender, date of birth, email id, and mobile number.
Step 9: After checking the box to authorize the override of your DNC/ NDNC setting, you can view all the credit card offers that are available for you for an easy comparison of credit cards and select the card that seems most suitable to your needs.
Apply for Credit Card Online
Nowadays, it is very easy to avail a credit card if you meet the eligibility criteria. You do not need to visit your bank branch for the purpose; credit card application can be made online. You can visit the web portal of the bank and apply for a credit card by filling out some basic details like name, email ID, contact number, income, address, etc. You will get a call from a credit card representative of the bank who will guide you through the process. A representative will also come to collect your documents at your doorstep.
If you cannot decide which card to choose, you can compare the best cards at finbaskets.com and then apply directly without having to visit the websites of different banks.
Apply for Credit Card Offline
People who are not comfortable with online methods of credit card application can visit the bank branch directly to apply for the same. Just visit the branch and communicate about the type of credit card you need. The representative will tell you about the credit cards that match your needs. Then, you will have to fill the credit card application form and provide some KYC documents such as identity proof, address proof, etc. You will also be required to provide proof of income and two passport sized photographs.
A credit card company enters into agreements with various merchants for them to accept their credit cards. The credit card issuer issues a credit card to their customer. When a bank issues a credit card, a revolving credit line is created for the customer and this line of credit may be used by the card user to make purchases or to get cash advances by using your credit cards as ATM cards. The card holder then receives a monthly bill thbuttonat can be paid off before the due date without incurring any interest for using the credit provided by the card issuer. When a purchase is made, the cardholder is basically agreeing to pay the card issuer the amount that has been incurred, at a later date.
While making a purchase, the card holder has to swipe the magnetic strip of the card on a card machine at the shop. The merchant copy of the receipt generated needs the card holder's signature for validation. Newer cards feature the more secure chip and pin system, where the chip on the card is read by the merchant's card machine and a four or six digit pin is required to complete and validate the transaction.
Apart from using the card through physical presentation, as discussed above, the booming online shopping industry has also benefited hugely through the ubiquitous availability of credit cards. Key details required for completing an online transaction using a credit card include the card number, the card expiry date, the CVV number on the back of the card and a special transaction password or one time password sent to your registered mobile number.
A supplementary credit card is an add-on credit card issued under the original or primary card. These credit cards can be issued for family members of the primary card holder. Every credit card has a limited number of supplementary credit cards that can be issued. This number differs from bank to bank and also depends on the type of card issued.
Most banks issue add-on cards under a primary credit card for free, however, some banks have a small fee applicable on the issue of any additional cards. On the other hand, there are also situations where a certain number of additional cards are available for free, and anything over that number will be charged. The important point to remember here is that the overall credit report that is affected and any dues that are incurred will be on the primary account only. Therefore, any payments that are not made by the due date will be the liability of the primary credit card holder to pay, along with the late charges and applicable interest. So it becomes important to ensure that any supplementary cards that you apply for are only given to the people who are trustworthy and will be able to use the card properly and with care.
Regardless of the number of cards that are issued under a primary credit card, they will all be directed to a single account for the payment of dues.
The Credit limit: Mostly, the credit limit that is set on an add-on credit card is the same as that of the primary credit card, but according to certain bank conditions, the credit limit for supplementary cards are set lower than that of the primary card. If you have been issued more than one add-on card, the sub limit decided will be distributed equally among the add-on cards to match the total limit of the primary card. This sub limit will also be applicable on any ATM withdrawals.
Details: The information about all the transactions that will be conducted is recorded on one primary account. So if you hand over the additional card to someone else, you can also keep track of the withdrawals and transactions along with the exact dates.
Add-on cards mostly enjoy the same credit card reward programs as the primary cards. This however, may vary with each issuing bank, but the basic benefits are:
When you make a purchase using your credit card, you are essentially taking out a short-term loan. The interest that is applicable on this loan will depend on when you pay it back. If you are able to make a payback before the due date, there will be no applicable interest. Credit cards also have a small grace period before the payment is due in any billing cycle, which can be something around 30-45 days. Paying before the end of the grace period will help you avoid any interest, while paying less than the total balance will accrue interest on the average daily balance.
With a number of benefits supporting credit cards, the most important one is that it can help you build your credit score. Good credit, in turn, will help you obtain loans much easily in the future, that too at very favorable rates. It also helps in getting lower insurance premiums. Apart from this, there are a number of credit cards with rewards programs that can offer card holders with a number of extra benefits like reward points, shopping benefits, etc.
Say that you have a credit card billing cycle of 5th January through 4th February, and the due date is 1st March, then any purchases that are made within the period will remain interest free until the due date. This is the grace period that is offered for credit cards in India, after which the balance will be subject to interest. Any cash advances that are taken on your credit card do not enjoy the benefit of a grace period.
If the cardholder does not pay the full credit card bill before the due date, the entire outstanding balance will attract the applicable rate of interest for credit cards. Not just the balance, any new spending on the card will also have these interest rates applicable, until the entire balance has been paid off. However, in the case of a cash advance, unless the card holder pays off the entire bill balance each month, there will be no grace period for them. Low interest credit cards are available, and should always be looked into whenever you compare credit cards. When the credit card holder does not pay the credit card bills on time, then interest is applied on it which leads to accumulation of credit card debt. Being late on paying credit card bills is referred to as default. Late penalty fee can also be applied on the accumulated credit card debt.
On the front side of your credit card, there are 16 numbers which are unique to your card. American Express and Diner Club cards have 15 digit numbers. These are not just random numbers; you will be surprised to know that every single number carries a specific meaning. Credit card numbers are assigned by the International Standards Organization (ISO). Let us break down these numbers and understand what they mean.
The first six digits of the credit card are a combination of Major Industry Identifier (MII) and the Issuer Identifier Number (IIN). In fact, it is only the first number that defines the major industry, that is, the banking and financial industry. Some other popular MII are-
The first number (MII) along with the next five numbers represents the exact identifier. These six digits are together known as the Bank Identification Number (BIN).
Next is the account number which identifies the user. Different banks and card issuers may have different lengths and number sequences when it comes to the account number of the user.
The next part of your credit card number is the checksum, also known as the Luhn Algorithm. This algorithm was awarded as a US patent to IBM Scientist Hans Peter Luhn. It is used to confirm the initial digits of a credit card and prevents casual attempts to make up new credit card numbers.
This is how you can implement this formula-
Step 1- Double every odd number on credit card starting from the right. Suppose your card number is 4321 4456 9212 7754.
5x2=10, 7x2=14, 1x2=2, 9x2=18, 5x2=10, 4x2=8, 2x2=4, 4x2=8
(10, 14, 2, 18, 10, 8, 4, 8)- This is the sequence you get.
Step 2- Now add these digits to the un-doubled numbers. Add the double digit numbers to form a single one. For example, if it’s 14, the single digit will be 1+4=5. So now the sequence is- (1, 5, 2, 9, 1, 8, 4, 8).
(1+5+2+9+1+8+4+8) + (3+1+4+6+2+2+7+4) = 67
Step 3- If the number you have got from step 2 is not divisible by 10, the credit card number is fake. Since the above number is 67 and it is not divisible by 10, this credit card number that we started with in step 1 is a fake number.
Apart from these, a CVV and issue and expiration dates are assigned to your card. CVV are security codes for different credit card providers.
Some of the key benefits of a credit card are:
With a number of credit cards available, offering a variety of benefits, which credit card is best for you depends mainly on where your major spending pattern lies. It also depends on how you would want to make your credit card bill payments. There are however, a few features that you should take into account before you compare credit cards and decide which one is the best for you.
The eligibility for a credit card differs from provider to provider. However, the basic criteria are as follows:
The documentation requirement also varies from issuer to issuer, some of the key documents required to apply for a credit card are as follows:
Latest 3 months salary slips, Salary account bank statement for six months.
Latest IT Returns with computation of income and other certified financial documents Business continuity proof.
There are various factors that can affect the credit card interest rates and interest is applied on any balance you owe on your credit card. Credit card interest rates are the highest among various debt instruments available to the customer. In most cases, credit card interest rates start at 18% and may increase based on various factors such as your payment history, the type of card and various other factors.
We, at finbaskets.com, help you compare the various types of credit cards available vis-a-vis your requirements. Through our unbiased credit card eligibility calculator, you can easily identify the pros and cons of the cards on offer before choosing and applying for one. Our analysis and suggestions are free from any inclinations that may adversely impact your financial planning.
As a result of the popularity of cashless transactions especially among younger customers, most banks in India have issued credit cards to cater to various segments of the population. Some leading players include Standard Chartered Bank , HDFC Bank , , Ratnakar Bank, SBI Cards , ICICI Bank and many others.
It is always a good idea to compare credit cards online before deciding on which card to apply for. The interest rate varies from bank to bank and lender to lender, but there are also other factors that can affect the interest rates that are offered to the applicant. The basic premise on which credit cards interest rates are based is the credit score of the main card holder. This score in turn is also based on a number of factors. Some of the factors that are attributed with affecting the interest rates are as follows:
The history of payments made by the credit card holder provides the assurance to the credit card issuer that the money that is lent will be repaid. Lenders can easily look into your payment history to check if you have paid your bills on time as well. In case you have defaulted payments, your credit score falls, and accordingly, you will be required to pay higher rates of interests on credit cards.
This factor refers to the amount of credit that you already owe to a lender or lenders. The calculation of this amount is done based on the total available credit that you have already used. Although, owing a lesser amount is better in the long run, owing nothing is not good for your interest rates. By having credit owed, a lender can track your repayment habits. This tracking consequentially helps in confirming that if you borrow money, you are responsible and financially stable to make repayments.
The credit score that you have is also in parts influenced by the age of your credit history. This refers simply to how long you have been using credit. A lender too checks the dates of your credit history to see for how many years you have been using credit, the age of your oldest account as well as the average age of all the accounts you own.
In case you have been responsible and have been maintaining a good CIBIL record that has not been marred by any negative items like late payments then you might be able to get lower credit card interest rates. If you are a beginner, the short age of your history will not mar your interest rates as long as you have been making timely repayments and do not have too many repayments due.
Whenever people experience a cash flow problem or plan to take on a lot of new debt, they tend to open a number of new credit accounts. An increase in the number of credit purchases that are done together or successively will not only hit your credit score, but will make everyone rather skeptical about your capacity to make repayments. As it involves greater credit risks, CIBIL rates you on the number of new credit purchases and new accounts applied for within a given period of time.
For instance, if you have a home loan that you are already paying back, and you apply for another loan, as a part of determining your repayment capabilities, the lender will look at your existing monthly debt and calculate how much new EMI you can afford to pay every month. If after this, you apply for a few credit cards, the image that is portrayed is that you tend to make a number of purchases on the cards, making you incapable of paying back the EMIs for the new loan. This would lead to suspecting your ability to make repayments, further resulting in a higher rate of interest being offered to you.
The credit use that you have on various accounts is also taken into consideration. This could include a number of credit lines, including, installment accounts,credit cards, auto loans, personal loan, mortgages, etc. The number of accounts that you have is also taken into account, and having a mix of credit is always better than having a single type of credit. If you have different types of credit, the lender will be able to see if you manage them responsibly. This can also help you in getting lower interest rates.
Unsecured And Secured Credit Cards
Primarily there are two types of credit cards - secured and unsecured.
Secured cards refer to the kind of credit cards that are backed by a cash deposit that is generally equal to the credit limit of the card. This cash deposit acts as collateral and is able to remove the risk of non-payment. For those who have not yet built a solid credit history, secured credit cards provide a great option. Prepaid credit cards or debit cards are unlike a secured credit card. With secured credit cards, as you keep spending, it does not affect your cash deposit, as is the case of prepaid and debit cards. The credit card payments are made in the same way as with unsecured cards, interest is also applicable in the same way if you do not make the repayments by the end of the grace period, and if the balance is not paid in full. Once the transition to an unsecured credit card is made or if you cancel your secured card, the cash deposit will be returned to you, provided that you have cleared any due balance.
An unsecured credit card on the other hand is not backed by any cash deposit and no collateral is required for it. Your card will have a credit limit that will be decided based on the level of your income as well as you credit history. The credit limit of the first card people own is generally low.
Credit card issuers take on a much bigger risk when they approve an unsecured credit card, and that is why, for beginners, it is always easier to start with a secured card, or to get a cosigner for an unsecured card. Another option people can choose is to be added to a friend or relatives credit account as an add-on authorized user. Under this method you will not be legally obligated to pay outstanding balances, but will be able to use a credit card and might also be able to avail the benefits of the good credit habits of the primary card holder.
Fees And Charges For Top Credit Cards
Beginning with the most basic cards, these are credit cards that have a rather low credit limit and a basic stature among other types of cards. Many times, credit card companies club various reward programs with these cards to improve their appeal to customers.
The eligibility criteria for silver cards are higher than that for regular cards. These cards have higher credit limits and also offer more benefits. People with an experience of at least 4 to 5 years of using a credit card can opt for these cards, the main features of which are:
Steps above the silver cards, gold cards enjoy an even higher credit limit and status as compared to the silver cards, and also have higher eligibility criteria, and are made for higher income groups. Its main features are:
These types of cards are rather similar to gold credit cards but enjoy a few additional benefits. The exact features will of course vary from bank to bank, but a few of the common features are:
This is a type of credit card that is famous mainly because of the rewards that are attached to it. These rewards are based on the usage of the card. The various types of cards that come in this category include:
Premium Credit cards
Specially designed for high net-worth individuals, every premium credit card in India provides best in class rewards designed to exceed the expectations of even the most discerning card user. These high rewards do come at a price as these cards often have high joining and annual fees.
Kisan Credit Cards
A relatively new addition to the types of credit cards offered by leading market players, Kisan credit cards in India are provided to rural farmers in India so that they can get access to credit at preferred interest rates.
International Credit Cards
If you are a compulsive globetrotter, choosing the best international credit cards in India is more of a necessity than an option. These credit cards can be used to make transactions overseas so that you do not have to worry about carrying wads of cash during your travels to distant destinations.
Student Credit Cards
The student credit card market in India is at best in its infancy, but banking on the probability of growth in the not so distant future, some card issuers have started introducing these. These cards are on offer only to students who are 18 or older and enrolled in full time education at an institute.
This type of card is generally bought to pay off any outstanding amount on one card with the other. In this category, a number of cards also offer interest free time periods.
When it comes to getting your first credit card, it is usually one that is associated with your salary account. Most of the times, the credit card is taken without any research into the features and the benefits, and without a comparison of credit cards. Of course, all credit cards are not the same, which would make one wonder whether their card is the best card for them. Taking a new credit card, or getting an upgrade seems like the obvious solution to this, so here are the factors that you should consider before you opt for a new credit card:
If you upgrade your present credit card, you will be choosing an increased credit limit. Getting a new card, on the other hand, will raise your overall credit limit. This would imply that you would be able to spend more without putting an undue burden on your credit usage.
This depends on the type of card that you choose. There are a number of benefits that you can avail from the numerous offers and rewards that are up for grabs. If you already have a credit card that offers you benefits on fuel, maybe the next card you choose could have rewards on shopping or even fine dining. In other words, do your research and apply for a card that covers benefits on spends that were not previously covered.
It is a fact that if you utilize the credit limit of a card or multiple cards up to 50% of the overall limit, it has an adverse effect on your overall credit score. It is not an uncommon occurrence and if you are one of the people who fall in this category, getting your card upgraded or getting a new card will make sense for you. With this, as long as you are able to keep your expenses under check, you will not have to worry about putting stress on your credit score.
An increased credit limit is able to sway a lot of people into extra expenses. But if you are able to resist that and keep your expenditure in control, it will reduce your risk factor and you will be viewed as a 'safe' borrower by the banks. The simple reason behind this is that you show limited card usage and have access to more credit; this will improve your CIBIL credit score gradually. A good CIBIL score in turn will enable you to get quicker loan approvals. You will also be able to receive negotiated interest rates on loans.
An additional credit card can actually help you in better managing your cash flow. You can ensure that you are able to manage your monthly budget perfectly with a simple step. Ensure that the new card that you take has a billing cycle that is different from that of your present card. If you have a billing cycle for your present card that is billed at the end of a month, when you apply for a new card, opt for a billing cycle that is billed mid-month. This way you will be able to split your expenses.
One of the main factors that you should consider is that by taking a new card your total annual fee will increase. The same is the case when you upgrade your card. With an upgrade, you will also see a hike in the annual fee that you are already paying. The penalties that are applicable on exceeding the credit limit of credit cards will also increase, along with the charges imposed on ATM withdrawals or purchases made overseas. If you are unable to make the repayments on time, you will also be charged a greater interest rate on the outstanding balance.
Upgrading your credit card or even applying for new cards may seem like a great idea, but it is a decision that must be taken only after due consideration of your needs and capabilities. Frequent upgrading or purchase of new credit cards will make you seem as financially irresponsible and will end up affecting your credit score.
All credit cards have a varying requirement for the minimum income of an applicant. If you do not meet that minimum requirement, your credit card application may get rejected. It is recommended that you should try to search for cards that are aligned with your income bracket to avoid any rejection on this basis.
Surprising as it may sound, the area where you reside or where your office is located, also plays a role in the acceptance of your credit card application. Banks have a list of areas that are blacklisted and where they do not provide any services.
False or even incomplete information on your application form is also one of the reasons that your application gets rejected. The bank will not call you to supply any missing information, but will straight away reject it. So, it is a good idea to spend some time going over your filled application form and correcting anything that seems out of place, wrong, or incomplete.
When a change is to be made in your credit report, it usually takes some time. It is also possible that some previous debt of yours that has been cleared are not updated on your credit report. So before applying, make sure that you go through your CIBIL score and report, and inform the authorities if there is any discrepancy in your report.
A credit history is what shows your prospective card issuer your risk perception. The following are a few of the situations that would show you as a risky customer:
This is one of the most common and obvious reasons for the rejection of a credit card application. You might not have debts presently, but your payment history reflects in your credit sIf you use your credit card excessively and tend to exhaust your credit limit, or even if you use up to 50% of the credit limit on a number of cards, you will be deemed as financially unstablecore and of course in your credit history, which ultimately affects your credit card applications.
With finbaskets you can apply for a credit card online. Just visit our website and check whether you qualify for a credit card or not. Once you check your eligibility for a credit card online at finbaskets, it displays a list of popular credit cards based upon your eligibility. You can then go in for a comparison which helps you to make an informed choice. Post comparison, you can apply for a credit card online at finbaskets. Applying for a credit card was never this easy!
finbaskets gives you the leading-edge, here how:
Q. Do all credit cards feature an annual fee and joining fee?
Ans. No, not all cards feature an annual fee and/or a joining fee. In case of basic credit cards, there is usually no annual fee; however, cards that have an annual fee often provide more benefits than the zero annual fee cards.
Q. Can I get cash from the ATM using my credit card?
Ans. Yes. This facility is known as cash advance.Finally, you can make a choice from the list of best credit cards in Indiaance and you can withdraw a part of your total credit limit as cash from an ATM. But such cash withdrawals carry additional charges and feature a higher interest rate than your credit card-based purchases.
Q. Can my credit limit increase later on?
Ans. Yes. Credit limits are revised from time to time by the card issuer. This usually takes into account your previous payment track record; however, your limit may also be downgraded if you have missed multiple credit card payments on previous bills.
There are numerous credit card providers in the market offering several benefits and features on their cards. So, it is a difficult task for an individual to find the perfect card. Here at finbaskets.com, you can compare the credit cards available in the market and choose the one that best matches your preference.
Here are a few reasons why you must apply for a credit card through finbaskets.com-
Compare Credit Cards- You should never choose the first credit card that you come across. Financial decisions need thorough research and comparison. finbaskets.com is a platform where you can compare four cards at a time. Know about the net savings that you can make on each card, annual fees you will have to pay, reward points, general and luxury benefits, insurance, etc. Every card has been marked with what it is best for such as shopping, dining, fuel or travel. This will help you find the perfect card for yourself.
Simple Application Process- With finbaskets.com, your credit card is just a few clicks away. You do not have to visit different banks website to apply separately. Compare, find and apply online without any hassles.
Customer Support- finbaskets.com customer support team is always there to listen to the customer’s queries related to credit cards and resolves them at the earliest.
Though the credit card eligibility criteria and documentation process varies with different banks, there are a few things that must be in your checklist when applying for any credit card-
Identity Proof- You must have a valid identity proof at the time of credit card application. This may include PAN Card, Aadhaar Card, Passport, Driving License, Votes Identity Card, etc.
Address Proof- A valid address proof is also needed at the time of credit card application. Documents that work as address proof include passport, ration card, voter’s ID card and more.
Proof of Income- You will also be required to submit your income proof which includes salary slip, bank statement, etc. Note that these documents should be up to date. Old documents are not considered as valid income proof. Self-employed people will also have to submit income proof but the supporting documents may vary.
Photograph- At least two passport sized photographs will be required for credit card application.
The main reason why people wish to take a credit card is so that they can convert their high-value purchases into easy Equated Monthly Instalments (EMI). So, what are these EMIs? EMIs are used to pay off both interest and principal on your borrowing so that over a period of time the entire loan is paid off in full.
Credit card EMIs can be calculated manually or using an excel sheet to cross-check whether your bank is charging you fairly.Credit card EMIs can be calculated manually or using an excel sheet to cross-check whether your bank is charging you fairly
For calculating credit card EMIs, you will need the following information-
P = Principal
R = Rate of Interest (this should be the monthly rate and not the APR)
T = Tenure of the Loan
For calculating the EMIs in Excel Sheet, you should use this formula- PMT (rate,nper,pv). The result will come in negative or red highlight, which indicates that it is cash outflow.
The formula to be used for manual calculation is
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
Here, P stands for the principal loan amount, R is the interest rate per month and N is the number of monthly instalments. Using the above formula, you will get the same result as you got from the excel sheet.
However, both these calculations are lengthy and complicated. A simpler method is to use our EMI calculator to find out the EMI that you would have to pay per month using the above three components- Principal, Rate of Interest and Tenure of Loan.