When applying for a credit card what we tend to do is quickly glance at the credit card terms and conditions page and then focus more on the attractive offer page to read about the perks and benefits. It is true to say that all benefits and rewards often come with certain limitations and so is the case with credit cards. If you need to know everything about your credit card including the fees, benefits, restrictions etc, you need to dig deep into the card’s terms and conditions.
Important Credit Card Terms and Conditions
People often ignore the terms and conditions associated with a credit card because first they don’t understand it and second they don’t want to put in the effort to decode a document full of financial jargons. So, here we have explained the 9 significant parts of a credit card MITC (Most Important Terms & Conditions). A credit card MITC could be a 10-page long document but you don’t need to read every page of it. Given below are the terms you surely need to know about:
|Cardholder Agreement||Introductory Offers||Interest Rate|
|Foreign Transaction Fee||Late Fee||Cash Advance|
|Bill Payment T&C||Add-on Card T&C||Rewards|
A cardholder agreement is a legal document that establishes a contract between the cardholder and the issuer and outlines the obligations both have towards each other. The MITC which includes fees and charges related to the card is, in fact, a part of the cardholder agreement.
Your credit card may come with some introductory offers like extra discount with select brands for the first year, no charges on balance transfer for 6 months and the like. These are offered by the card issuers to attract the customers but there are some underlying conditions for those introductory offers which may be related to spending restrictions or offer period. You must read the MITC (Most Important Terms & Conditions) document to know the terms related to the introductory offers.
Interest Rate/Finance Charges/APR
If you fail to pay the full amount as mentioned in your credit card statement within the monthly deadline you would attract interest or finance charges on the outstanding amount.
For example, if the total amount payable for the month is Rs 20,000 and you choose to pay only Rs 10,000, the balance amount (i.e. Rs.10,000) would attract interest generally ranging from 35-45% per annum. Given below are the finance charges on some popular credit cards:
|Credit Card||Interest Rate (per annum)*|
|SBI Card Elite||40.2%|
|ICICI Rubyx Credit Card||40.80%|
|Citibank Cashback Card||37.20% to 42.00%|
|Amex Membership Rewards Credit Card||42%|