What is a Credit Card ? and How it Works

A credit card is a plastic item that you may use to pay for groceries, accessories, movie tickets, and other things in addition to giving you access to airport lounges and other perks like round-the-clock concierge service. Spending money on the card enables you to earn rewards, deals, cashback, waivers of gasoline surcharges, and much more. Rewards can be redeemed for premium goods, cashback to credit card accounts, and other things. Most of these prizes would expire two to three years after they were accumulated. Some cards, however, offer reward points that never expire. Additionally, you can apply for a best credit card online and receive rewards after spending a certain amount as specified by the best credit card providers.You can increase your savings by receiving these benefits in the form of gift cards or charge waivers. With a few clicks, you can buy something online. If purchasing products online doesn't feel comfortable to you, you can alternatively go to a physical store and use your card to make your purchases. You have two options: use a credit card to make a direct purchase, or select an EMI plan. No interest will be charged if you select option one and pay the whole amount owing. If not, the credit card company would incur interest at the rate of 2.50%–3.50% each month, adding up to 30%–45% yearly. A cheaper interest rate of 13% to 18% per year is offered with the EMI option.

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Feature and Benefits of Credit Cards

Here are the credit card benefit and feature :

  • Rewards points are available for a variety of physical and online purchases. Earned rewards can be used to purchase products from renowned companies, movie tickets, and flights. Each card has a different redemption rate; some provide INR 1 for every reward point accrued, while others only offer 20 or 30 paise.
  • Customers can also take advantage of accelerated reward point promotions. Consider a card that offers 10 regular reward points for every INR 100 spent. Another offers 5X bonus points for every INR 100 spend. The latter is only an expedited incentive offer that increases the total awards to 50 from 10 under the standard reward system.
  • Cardholders spend much less because of cashback and discount incentives. Discounts signify a complete price decrease, whereas cashback is applied to the card account on a specific date following the transaction.
  • In the ratio that the bank specifies, reward points may also be redeemed for cashback to the credit card account.
  • Reduce the cost of refuelling your vehicle by requesting a surcharge waiver for fuel purchases.
  • Cards become more enticing when they come with access to golf courses, movie ticket vouchers, and discounts at restaurants and stores.
  • Travel credit cards offer a variety of benefits, including the ability to accrue air miles, get cash back or discounts when booking hotels, and more.
  • Enjoy access to lounges at specific domestic and international airports.
  • Get concierge assistance 24 hours a day for help with booking hotels, renting cars, sending flowers and gifts, and other things.
  • Your annual charge is waived when certain milestones are met.
  • With enticing interest rates, an instant loan is available against a credit card.
  • When a lost or stolen card is reported immediately to the relevant lender using their helpline numbers, the zero lost card liability feature covers any losses resulting from the fraudulent use of the card.
  • Resolving disputes
  • Replacement card service for cards in need

Documents Required for Credit Card

Here are the documents required or best credit card in India

  • Pictures in passport size.
  • Identity Proof - A passport, a PAN card, a ration card, an Adhar card, a voter identification card, or a driver's licence.
  • Proof of Address - Anything from a passport to a lease agreement to a phone bill to a ration card to an electricity bill to an Aadhar card.
  • Candidates must possess a PAN card, a Form 16 and an income tax return statement.
  • Recent pay stubs, a certificate from the last three months, or a bank statement from most recent showing the credit of wages for at least three months.

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Eligibility Criteria for Credit Card

  • In order to apply, you must be at least 18 years old.
  • If you apply for a credit card online, you must be under 65 years old.
  • A salary must bring in at least 2 lakhs INR every year. However, in order to receive permission, self-employed individuals must earn at least INR 1.5 lakh annually. However, the income requirements can vary from one bank to another.
  • For a hassle-free acceptance, the credit score must be 750 or higher.
  • Type Of Credit Card

    In India, a wide variety of credit cards are available to meet various requirements and preferences. common types consist of,

    Reward credit cards - Which grant points for purchases?

    Travel credit cards - Offer bonuses and privileges related to travel;

    Cashback Credit cards - Cashback programmes return a percentage of your purchase price.

    Premium credit cards - offer special benefits.

    Shopping credit cards -offer rewards and discounts at participating retailers

    Fuel Credit cards - purchases that offer cash back or reductions

    Business credit cards - Designed with professionals and entrepreneurs in mind.

    To maximise perks and incentives, choosing the appropriate credit card that is in line with your spending preferences and financial objectives is essential.

    FAQ - FinCrif Freqently Asked Questiones

    Your line of credit from your credit card can be used for purchases, cash advances, and balance transfers. By the day the bank specifies, you must repay the money. You must keep in mind the minimum payment due each month by the due date while using a card.

    Yes. Most credit cards have a reward point system where you accumulate points for every dollar you spend. These points can be exchanged for gift cards, money, or air miles.

    Typically, credit card applications are approved with credit scores of 750 or higher. Scores below 750 are typically regarded as bad, and approval could be conditional on submitting collateral (such as fixed deposits) as security.