Hello, friends, and welcome to another new article. We often hear about credit cards from most people, who say that there is a lot of benefit to getting a credit card. In such a situation, people want to know what is credit card? So in today's article, we will know what is credit card, What are the advantages and disadvantages of credit cards? And we will know how does a credit card work. And the most important thing is whether we should use a credit card or not.
If you read this article till the end, then I assure you with full confidence that you will get all the information in this article and will not need to read any other article, so let's go ahead.
In today's time, there has been a phase of credit cards in which the youth are showing their attitude towards credit cards. If we talk about a few years ago, credit cards were neither so popular nor were people used to doing such things. But believed more.
Time gradually changed and the prevalence of credit cards increased, but the biggest revolution in the world of credit cards came when the Internet came, because with the advent of the Internet, everything went online, from shopping to ticket booking. People started doing many jobs, like placing orders and sitting at home, and in return, they also used to get rewards and discounts. Looking at this opportunity, big online shopping platforms like Amazon and Flipkart also started giving discounts and rewards for online shopping with credit cards, which increased the interest of users in credit cards even more, and people used credit cards on every shopping trip. I started getting more and more discounts through this.
In view of this, almost every banking and non-banking company started launching their own credit cards, due to which credit cards gradually became a trend.
Let's first know what is credit card.
what is credit card
If you understand it in simple words, it is a plastic card issued by banks or financial service companies that can be used for shopping, bill payment, recharge, ticket booking, and many other types of payments.Understanding this in more easy language and with an example, suppose that this month's salary has been exhausted from your bank account and the next salary will come next month. Now, in the meantime, you have some important shopping, mobile recharges, bill payments, ticket bookings, or many other important things to do, and you have money too. No, in such a situation, if you have a credit card, you can easily do all your work using it, and you can deposit the money used when the salary comes.
With this, let us know how does a credit card work.
how does a credit card work
When we use a credit card, we are often taking money on credit from the issuer of that card, and it has to be returned within a specified time. Delaying the payment means paying heavy interest on it, but within the specified time. No interest is to be paid on the payment.If we understand it in simple language, when we use the credit card for any transaction, then the credit card company pays all our merchant fees, which we have to return within a certain time.
Through a credit card, we can do any transaction and purchase within the approved credit card limit; after that, we can increase our credit limit by paying on time.
what is credit card, and how does a credit card work? After knowing this, let us also understand what is credit limit.
what is credit limit
what is credit limit? In simple words, this credit card limit is a limit given by that company, under which a user spends within the limit through that credit card, and after that, the user can repay the amount spent within a time limit by paying the amount. Can increase the credit limit.When purchasing through a credit card, if a user does not return the amount spent by the deadline, then high interest is charged to him. If the user does not return the same amount for a long time, then his credit score is affected. Due to the bad condition, no bank will give loans in the future. Nor will he have any credit cards, so to improve your credit score, you will have to increase your credit limit, for which the amount spent will have to be repaid on time.
what is credit score
what is credit score? Mainly, credit card scores are also called civil scores. A credit score is the number that shows who has to give a loan and who does not. In a credit score or civil score, the last six months of the user's financial reports are seen.If the user has repaid the previous loan on time, then his credit score is very good. On the contrary, if a user does not repay the loan amount on time, then due to a bad credit score, the chances of getting the loan next time are reduced.
The loan is easily passed if a user's credit score, or CIBIL score, is at least 750.
types of credit cards
Although there are many types of credit cards, some important ones are like this.shopping credit card
Travel Credit Card
Fuel Credit Card
Entertainment Credit Card
premium credit card
secured credit card
Rewards Credit Card
Student credit card
advantages and disadvantages of credit cards
What are the advantages and disadvantages of credit cards? Let us know in detail.advantages of credit card
1 – Many banks and companies offer welcome offers on activating their credit cards, in which users get some reward points.2 – You also get a lot of reward points and cashback for shopping with a credit card, which gives you the advantage of paying after shopping.
3 – Along with this, if you have a credit card, you also get a discount on fuel recharges. If you do not have money at present, then with the help of this, you can get fuel for your vehicles.
4 – Credit cards are very useful for you in emergencies, where they help a lot with mobile recharges, bill payments, ticket bookings, flight bookings, hotels, and travel.
5 – The possibility of fraud on a credit card is almost negligible; in such a case, if your credit card is lost or stolen, within 3 days after informing the company, the company will compensate all the fraud money.
6 – Another big advantage of getting a credit card is that there is different insurance on different credit cards, under which the credit card company pays money according to the claim in health emergencies in the country and abroad.
7 – Along with this, most credit card companies also provide accident insurance against air accidents.
8 – A loan is available on a credit card at 0% interest until a time limit.
9 – If you spend with a credit card and also return it on time, then your credit score will improve, which will help a lot with personal loans as well as business loans.
10 – You can get huge discounts on many items through different online shopping platforms like Amazon and Flipkart.
disadvantages of credit card
1 – Most people who use credit cards buy unnecessary things in the name of rewards points and cashback, which are of no use. In such a situation, credit card companies give you greed so that you buy more.2 – Most credit cards charge annual charges or renewal fees, so if you use a credit card for shopping only two to four times a year, then it is harmful for you.
3 – If you spend with a credit card and do not pay on time, then credit card companies charge you high interest.
4 – Along with this, if you do not repay your loan on time, your credit may get damaged, causing difficulty in taking loans in the future.
how to use a credit card
1 – If you have to use a credit card, then do your expenses keeping in mind your earnings; otherwise, you may have to face huge problems later.2 – Apart from this, do not buy useless things in the process of getting more reward points and cashback.
3 – If the credit card is lost or stolen, inform your credit card company within 3 days so that the company can handle the fraud with you.
4 – Never withdraw cash from a credit card; if you do this, companies start taking arbitrary interest charges and many other types of charges.
5 – Along with this, deposit the amount spent on time so that your credit does not get damaged.
credit card terms and conditions
Credit card terms and conditions are something like this: It is very important to keep this in mind.1 – Except for some high-amount credit cards, there is no charge on all other credit cards; in this case, take only credit cards with free charges in the beginning.
2 – While taking out credit cards, pay attention to the interest rate, which varies on different credit cards.
3 – While taking out a credit card, do note that depending on its loan tenure, if it remains for a long time, you do not have to pay any interest until that day.
4 – A good credit card is also recognised because it can be used in the country as well as abroad.
5 – Along with this, it is also important to see this feature in the credit card: what is the limit for withdrawing cash in an emergency so that high charges can be avoided?
how to pay credit card bill
Let us tell you that you can easily pay the credit card bill with the help of NEFT, National Automated Clearing House (NACH), Visa-Credit Card Pay, Debit Card, Electronic Bill Payment, etc.Explain that, generally, the bill is generated between 20 and 25 days later. During this time, all the transactions done using your credit card are added to your bill on the date of bill generation, and you can make the payment.
how to get a credit card
Whichever bank you have an account with, you can apply for a credit card online by visiting their website. After applying, you will get a call from a representative of the bank who will ask for some important information. After this, your bank will accept your application and inform you after a few days. If your application is rejected, the bank will also give the reason for it. If you use online banking, then you can easily apply for a credit card online. If you do not have online banking facilities, you can apply for a credit card by visiting the bank.
Questions and Answers
Q: What is the other name of a credit card?
credit card or plastic card.
Q: How do I know the credit card dispatch location?
Credit card dispatch locations vary from bank to bank. Check the status of your credit by visiting the official website of the bank to which you have applied for the credit card and where the card will be dispatched.
Q: How many days does it take to get a credit card?
It takes at least 7 days for the credit card to be generated and sent to your address.
Q: How do I shop with a credit card?
To do shopping with a credit card, you have to get a shopping credit card made; after that, this credit card has to be used while paying the shopping bill and paid after shopping.
Q: How much interest is charged on a credit card?
Explain that the interest rate on a credit card is generally 2.5 percent to 3.5 percent per month. But it varies from Bank to Bank.
Q: What is the age limit for getting a credit card?
If you are planning to get a credit card, then you should be at least 18 years old. Explain that it is mandatory for you to have a regular source of income to take out a credit card, and you should not have any bad credit history.
Q: What is the difference between debit and credit?
If you make a purchase with a credit card, then the credit card company makes the payment, which has to be paid within a certain time. Apart from this, you can shop as much as you want according to your credit limit with the card. While the money is deducted from your bank account when you make a purchase with a debit card, apart from this, you can spend as much as you have in your bank account with a debit card.
Thanks for reading.
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