Credit Cards

A credit card is a line of credit which allows you to spend a certain amount of money even if you don’t have that money in your personal bank account. You will have to repay this money plus a rate of interest.

A rate of interest(usually just called “interest”) is an amount charged on top of the original amount you spent on your credit card. This amount will continue to increase if you do not repay what you spent. There may be additional fees if you do not repay the monthly minimum payments the bank requires.

The eligibility criterion for a credit card in India differs from bank to bank. Most banks will check a person"s credit history before providing him with a credit card since there is some financial risk involved for the bank.

Rate of interest on credit cards

You should consider very carefully whether you need a credit card. Only get a credit card if you know that you are able to pay the amount that you have spent plus the interest within the time specified by the bank.

Your credit history is a record of whether or not you have paid things back. If you fail to pay fines or an account like an electricity bill (even a previous credit card) it can have an impact on your credit history. A negative credit history may impact your ability to obtain a loan or mortgage in the future.

Remember, just because you are offered a credit card, it does not mean you can afford it.

If you get into financial trouble and cannot make the required payments on your credit card you should talk to the bank and seek financial counseling immediately. Usually if you talk to the bank you may be able to come to an arrangement that will allow you to repay it at an affordable rate – just don’t leave it too long.

If you intend to travel overseas and use your credit card you should notify your bank or financial institution in advance so they do not freeze your account. They may suspect fraud if transactions appear from another country.

If you lose your credit card you should notify your bank and the police immediately.

Tip: Emails that seem to be from your bank asking for your credit card details are often scams. If you have any doubt at all call your bank instead.