Q. Do all credit cards feature an annual fee and joining fee?
No, not all cards attract 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?
Yes. This facility is known as cash advance. 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?
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.
Q. What is a secured credit card?
A secured credit card is one that is issued against an asset say Fixed Deposit. It can be a good beginning for those who are not eligible to get a normal credit card. Leading banks like SBI and HDFC offer secured credit cards against fixed deposits.
Q. What is the difference between rewards and cashback on credit cards?
Rewards can be earned in the form of points which can later be redeemed against gift vouchers or statement credit whereas cashback comes directly into your credit card account. Most of the credit cards offer rewards and only a few provide cashback facility.
Q. What are the basic eligibility criteria for credit cards?
Banks have varied eligibility requirements when it comes to credit cards. The criteria also vary from one credit card to another. However, the basic criteria that an applicant is required to meet include age, income and credit score/history.
Q. What is a premium credit card?
Premium credit cards offer extra benefits on lifestyle, travel, entertainment, dining, etc. and they also charge substantial annual fee. International airport lounge access, concierge service, air accident insurance are some premium credit card features.
Q. What is credit card balance transfer?
Some credit cards offer the facility of transferring outstanding balances on other credit cards, consolidate the debt and pay back in EMIs. Banks also offer low introductory offers to encourage users to transfer credit card balances from other cards.
Q. Are co-branded credit cards available in India?
Yes. A number of banks have collaborated with different brands to offer co-branded credit cards in India. Air India SBI Signature Credit Card, JetPrivilege HDFC Bank World and Ferrari Platinum Credit Card by ICICI Bank are some co-branded credit cards in India.
Q. What are milestone benefits on credit cards?
Banks offer cardholders bonus rewards or shopping vouchers on reaching a particular spending limit within a specific period. This is termed as milestone benefit.
Q. My Credit Report does not show information on my new credit card. Why?
Usually, it takes up to three months for a new loan or credit card to reflect on your credit report. If it does not reflect even after three months, you should contact either your bank or the credit bureau.
Q. What is lost card liability cover?
This is a zero liability benefit offered on most of the credit cards under which the card user will not be liable to pay any amount against the expenses occurred during the period between card loss and the user informing the bank.
Q. Do credit cards come with specific cash withdrawal limits?
Yes. The cash withdrawal/advance limit on your credit card is pre-set and communicated at the time of credit card approval.
Q. How to read credit card statement?
The main components of a credit card statement are statement date, payment due date, total amount due and minimum amount due. These are mentioned usually at the start of the statement. The second part contains detailed information about transactions.
Q. What is the minimum amount due?
If you cannot pay the entire outstanding amount, the bank gives you the option of paying a minimum amount after which you will not have to pay any late fee. However, interest will be charged on the remaining balance.
Q. How can I pay my credit card bill?
There are various ways to pay your credit card bills such as net banking, mobile banking, bill desk, NEFT, cheque, etc. Alternately, you can also walk in to the nearest bank branch and make upfront payment over the counter. However, cash payment attracts certain fee.
Q. What does credit limit mean?
Credit limit is the total amount sanctioned by the bank on your credit card. This is the maximum amount you can use on your card. The bank decides the credit limit on the basis of your credit score, income and maximum limit on your existing credit cards. You can request a limit enhancement after a few years of usage but the approval of it will be at the bank’s discretion.
Q. What is the difference between a credit card and a debit card?
The basic difference between a credit card and a debit card is that debit card is connected to your savings or current account whereas credit card is a type of loan taken from the bank. In case of debit card, the amount is directly deducted from the connected savings/current account and there are no interest charges on its usage. However, in case of credit card, the amount is deducted from your credit limit.
Q. Do credit cards offer protection against fraud?
Credit cards are secured with chip and PIN, thus reducing the chances of fraud. Every time you make an online payment, you receive an OTP on the registered mobile number which you can use to authenticate the transaction.
Most of the credit cards come with zero lost card liability cover which means if your card is lost or stolen and you inform the bank immediately, the card will be blocked. This way, the card holder has limited liability in case of such frauds.
Q. What is credit utilization ratio?
This is ratio of your credit card usage to the total credit limit on your credit card. For example, if the total credit limit is ₹ 1 Lakh and you have used ₹ 30,000 out of it; your credit utilization ratio will be 30%. You should always try and maintain the ideal credit utilization ratio of 30% on all your credit cards.