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Credit Card understanding for free

What is Credit Card?

A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment – Investopedia.com 

A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder’s accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the other agreed charges) – Wikipedia.com

A credit card is a thin rectangular piece of plastic or metal issued by financial institutions, which allows you to spend money from a pre-approved limit to pay for your transactions at both online and offline merchants – Forbes.com

Credit Card & its Understanding

Credit card companies world-wide?

  • VISA. World Rank (Jan-07-2022) …
  • J P MORGAN CHASE & CO. World Rank (Jan-07-2022) …
  • BANK OF AMERICA CORPORATION. World Rank (Jan-07-2022) …
  • MASTERCARD. …
  • CHINA MERCHANTS BANK. …
  • WELLS FARGO & COMPANY. …
  • ROYAL BANK OF CANADA. …
  • AMERICAN EXPRESS COMPANY

Value.today


What are the 4 biggest credit card companies?

The four major credit card networks are Mastercard, Visa, American Express and Discover – wallethub.com

Why AMEX or American Express Credit card is so popular?

They are the best service provider and have special promotions and discount offers for the traveler or the customer who belongs to different countries throughout the world. They are best in providing on-time service and queries handlings. That’s why they are accepted by customers globally – Quora.com

What are credit cards usually used for?

Credit cards offer you a line of credit that can be used to make purchases, balance transfers and/or cash advances and requiring that you pay back the loan amount in the future. When using a credit card, you will need to make at least the minimum payment every month by the due date on the balance – usbank.com

Is it okay to use your credit card a lot?

Most experts recommend keeping your overall credit card utilization below 30%. Lower credit utilization rates suggest to creditors that you can use credit responsibly without relying too heavily on it, so a low credit utilization rate may be correlated with higher credit scores – creditkarma.com

What if I do not use my credit card?

If you don’t use your credit card, the card issuer may close your account. You are also more susceptible to fraud if you aren’t vigilant about checking up on the inactive card, and fraudulent charges can affect your credit rating and finances –money.usnews.com

What is a good credit score?

Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent – Equifax.com

Now coming to the main POINTERS of CREDIT CARD which everyone should know & understand:

  • Billing cycle
    • The credit card billing cycle refers to the period, at the end of which, a statement consisting of all the necessary details and numbers is generated. This tenure can be anywhere between 28 to 32 days and begins with the moment you activate your credit card
  • Minimum due
    • “The minimum amount due on a credit card is the minimum amount you are required to pay, on or before the payment due date, to ensure that you do not have to pay late fees.” By calculating a minimum amount, the bank ensures you can repay a portion of the principal outstanding every month
  • Billing date
    • The billing date or statement date is the date on which the statement is generated every month. It typically is the last day of the billing cycle for a given month. Any transaction conducted on the card post the billing date will reflect in your next billing statement
  • Due Date
    • The payment due date is typically 21-25 days after the statement date or post the billing cycle ends. The period between the billing date and the payment due date is the interest-free credit period or the grace period offered by your card issuer

What happens if I pay only the minimum amount due?

If you pay only the minimum amount due for a long time, you will have to pay high interest charges on the outstanding amount. You won’t get any interest-free credit period. Along with this, your credit limit will also be reduced to the amount that you haven’t repaid – paytm.com

What percentage is a minimum payment (India)?

The minimum amount due is calculated as 5% of your balance outstanding or the sum of all instalments, interest/other bank charges, the amount used over the credit limit and 1% of the remaining balance outstanding, whichever is higher –idfcfirstbank.com

How do chargebacks on credit cards work?

A chargeback, also referred to as a payment dispute, occurs when a cardholder questions a transaction and asks their card-issuing bank to reverse it. … If the bank rules against you, those funds are returned to the cardholder. If the bank rules in your favour, they’ll send the disputed funds back to you – squareup.com

Is chargeback same as refund?

A refund comes directly from a merchant, while a chargeback comes from your card issuer. … Chargebacks should be the next step if asking the merchant for a refund doesn’t work. You initiate a chargeback directly with your card issuer in the hopes of the transaction being reversed – cnbc.com

What is EMI on credit card?

When you make a purchase online using your credit card, you can convert the transaction amount into equated monthly instalments (EMIs). … The EMI includes a portion of the principal outstanding and interest component, which you need to pay every month until the full amount is paid – economictimes.com

Is credit card EMI a good option?

If you think the EMI option is very useful as you can save yourself from paying a huge amount of money at one go, you need to rethink. Typically, when you opt for a longer-term EMI, banks or the card issuer offers a lower interest rate, but it doesn’t mean that the total amount of interest you have to pay is less

Personal view: if you convert the amount into credit card EMI, you have these choices:

  • You would not end up saying upfront an whole amount at a time (which might later yield some interest to you in bank)
  • One would not have that big blow of amount taken out of account if you do not use credit card
  • If you use EMI from credit card, you have option to convert it to your choice of period I.e. 3,6,9,12 or 24 months depending on what is the actual amount of the product or service you are purchasing
  • EMI would not hurt like onetime payment though interest charged on EMI for longer period is higher than short period
  • If one is earning monthly, EMI option yields a best option as that would not yield any big blow to the account at once

Tip: EMI calculator formulae for 12 months

The mathematical formula for calculating EMIs is: EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P stands for the loan amount or principal, R is the interest rate per month [if the interest rate per annum is 9% or 12%, then the rate of interest will be 12/(12 x 100)], and N is the number of monthly instalments

What is WIFI credit card?

If your credit card has wifi symbol on it, means you own a credit card which does not require to be swiped, it is contactless card

How does WIFI credit card works?

The moment card is placed on to the reader, it reads the data from card and in highly secure manner it processes transaction

Better use would be have PIN in WIFI card so that it has some extra layer of security from your side too

Know about these Credit cards Fraud terms if you own Credit card:

Phishing

Usually done via an email that appears to come from a legitimate source, it’s an attempt to get you to provide personal information to a phony source. The thieves then use that information, often usernames and passwords, to commit fraud. These solicitations have many tell-tale signs, of which typos and poor grammar are the most common.

Skimming

A method of stealing credit card information; A skimmer is a small device attached to a credit card reader that collects data from the magnetic stripe on the card

Smishing

The same as phishing, but the scam message comes via cell phone text message. You are asked to call a toll-free number and led through an automated voice-response protocol, just like when you call your credit card company. You get asked to enter your credit card number, your CCV, and ZIP code

Sniffing

Intercepting Internet traffic passing through a computer network. It’s a bit like eavesdropping on data passing through the network and grabbing up data that can be used for fraud.

Tip:

In case when you are processing transaction online and credit transaction fails, generally the amount is credit back to the account within some days not weeks. In case it does not, note the transaction number and date of the transaction and call up the customer care and let them know what happened as they would be right one to guide you.

Either case, if the payment is processed from bank side, they would guide you that payment has been processed or it is at the seller side, so in that case generally, you have to contact the seller and advice for further action as your transaction has failed and do the necessary course of action from their side. If it is not, it is easy to resolve with bank side within some days.

How can I close/cancel a credit card?

Log into your bank site and cancel card online, if this facility is provided by bank otherwise please call customer care and cancel card with noting down the transaction number so that you do not incur any charges like annual charge or any other charge. Also, some banks want customer to write at certain address to cancel the card, so please do check for the necessary requirements before it costs you badly

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