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Credit Cards 101: A Handy Guide

By Sampath Akula - Jan 16,2020
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Credit Cards 101: A Handy Guide

If you are not very fond of carrying cash every time you go out shopping, don’t worry, the credit card has your back. Credit card is a payment card which allows users to pay for products and services through credit. It essentially allows you to borrow a pre-approved amount from the issuer of the card for a predefined time. It can be used for a variety of purposes such as buying a movie ticket, booking a hotel room or shopping for groceries. Credit cards are also called plastic money because they allow cardholders to pay for the purchases at a much later stage (mostly 50 days’ repayment cycle). In short, it offers interest-free credit facility to the cardholders for a pre-defined period of time.

Along with the credit facility with convenient repayment option, a credit card offers various other facilities like revolving credit, wherein an individual needs to pay the minimum balance per month. Also, credit card offers cash withdrawal facility from an ATM. One can even convert the lump sum purchase amount into easy EMIs which can be paid every month by paying interest amount applicable as per the ROI. You can also transfer the balance amount from another card at minimal or zero cost. Another one of the most important benefits a credit card offers is the reward points, which can be redeemed against renewal fees or gift coupons, waiver of surcharges on railway bookings or on fuel, frequent flyers miles – redeemable points for regular flyers along with discounts and cashback on particular purchases, etc.

Depending on the facilities and additional benefits provided on the credit cards, few of the categories available in the markets are – Classic, Gold, Titanium or Platinum or Privilege Cards and mostly affiliated to international payment gateways like AMEX, MasterCard including Visa.

Availing a credit card by an individual is quite convenient, as an individual is not required to carry cash while travelling or for shopping due to the risks involved. However, a credit card needs to be used wisely as it is useful but at the same time, it can be very dangerous and can make life miserable at times. If you are not well-versed with credit cards, don’t worry, there are more efficient ways to shop. You can use the Bajaj Finserv EMI Card to shop for a wide variety of items in a transparent manner.

It is very essential to understand the terms and conditions about the usage of a credit card before one starts using it. There is no harm in asking questions to the credit card issuing company if the cardholder has any doubts related to it.

Though the facilities offered with credit cards are useful, it can also become a long-term debt trap. Hence, one has to be aware of the implications of availing services offered with cards. The short tenure of payment can suck cardholders into a debt trap if the schedule is not monitored properly.

On the contrary, Bajaj Finserv EMI Card can be obtained with minimal documentation and can be used to buy mobile on EMI, besides other products from the Bajaj Finserv EMI Store. With the Bajaj Finserv EMI Card, you get an option to choose the schedule ranging from three months to 24 months.

It is advisable to pay credit card dues on time to avoid late or no-payment fees and at the same time maintain a good credit history along with a healthy credit score. The lenders access this history, whenever the cardholder applies for any credit cards or loans in the future. A bad history or credit score can be a cause for rejection of credit card or any loan in the present or future. For small and frequent purchases, it is advisable to pay through other secure and convenient options like UPI. Now you can pay using the UPI facility available on Finserv MARKETS for everything from booking a cab to buying your next meal in an easy and efficient way. Along with being ultra-fast, paying through UPI can also help you bag exclusive deals.

At times, getting a credit card can be difficult when you apply for it, due to poor credit history or any other amount of reasons. However, an individual can apply for a secured credit card. Secured credit card is a guaranteed type card and is issued against the deposit in the bank account of an individual. Also one of the features of this card is that it allows credit limit of up to 80% of the value of term deposit earmarked against it. Almost all major banks and some non-banking financial companies issue credit cards in the country.

Points to remember while opting for credit card

Before you apply for a credit card, please be aware that nothing comes for free, hence it is advisable to know all the hidden charges (if any) before you start swiping your card. If you do not want to get caught in the labyrinth of papers and documents for credit cards, opt for a Bajaj Finserv EMI Card. It can handily be used to buy a mobile phone on EMI without a credit card.

Important parameters to know while applying for a card

People tend to get excited by hearing about the best credit cards in India. However, one has to note that there are no good or bad credit cards in India. One can compare cards available in the market on the following parameters –

  • Upfront fees to be paid – One can check many credit card options available in the market. Banks issue credit cards by charging a joining fee upfront to the customer. There are few banks in the market who do not charge any fees upfront. So, the upfront fees is an important parameter while comparing the credit cards being offered by different financial institutions in India. While obtaining a Bajaj Finserv EMI Card, you have to pay a minuscule fee and in return get a host of benefits. The Bajaj Finserv EMI Card can be used to shop at over 84,200 partner stores.
  • Annual Charges – Credit cards come with an annual fee which is charged to the customer. This is a good customer acquisition strategy which even helps in monetising on a yearly basis. Also, there are some banks in India offering credit card free of cost for a lifetime. There are different ways of waiving off the annual fee. It could either be by extending rewards for the annual fee amount a customer pays or if a customer exceeds a particular spending limit in a year’s time, he or she is eligible for an annual fee waiver.
  • Reward points – This is becoming a critical parameter nowadays. Customer can earn huge reward points as the banks encourage the customer to use a credit card by rewarding them. These reward points can then be redeemed at many places including online and offline channels. The reward points can be used later to buy electronics and other goods. But with the Bajaj Finserv EMI Card, you can get upfront discounts on a plethora of electronics and other products. Using the card, you can also buy mobile on EMI without a credit card through the Finserv MARKETS App. The app can help you get exciting deals and can act as a one-stop-shop for all your financial needs.

Note – one should not sign any blank application form or documents. Further, one should even keep a copy of the documents submitted to a credit card executive, for future references. Thus, based on these criteria, you can evaluate the range of options at hand and select one that aligns with your financial goals and needs.

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor-made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no-cost EMIs to 4 hours of product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522