What is Credit Card ? Advantages and Disadvantages of Credit Cards

What is Credit Card - we will learn about what is a credit card, what are the benefits of a credit card, how it works etc. A credit card is a type of credit card, through which purchases can be made and bills can be paid very easily, credit card bills can be paid only within a certain time frame. 

What is Credit Card ? Advantages and Disadvantages of Credit Cards

Credit cards are used by many people in today's era but there are some people who do not have any special knowledge about credit cards. If you are one of those people then don't worry as this article will give you all the credit card related information, you will enjoy reading this article.

What is Credit Card ?

A credit card is a financial instrument issued by banks, it is a thin plastic card with a predetermined credit limit. Credit cards help you do cashless transactions, the card issuer sets the credit limit based on your credit score, credit history and your income. 

Credit card means borrow account, if you don't have cash you can make purchases with credit card, and later at the end of the month you can pay the credit card bill.

What is the Difference Between Credit Card and Debit Card

The main difference between credit card and debit card is that when you swipe a debit card, the amount is deducted directly from your bank account, whereas when you make a purchase with a credit card, the amount is deducted from your pre-approved is taken. range. cut off.

In the case of a debit card, the account holder can access the savings account directly to view the expenses, as the debit card is linked to your savings account, while the credit card is linked to your financial institution or issuing bank.

What are the Benefits of Credit Card

A credit card is very beneficial in case of an emergency, overdrawing from a bank account or during loan processing, a credit card is a very useful option. Your credit score can improve if you spend money with credit cards and make payments on time, which will come in handy in the long run, especially when you apply for business loans or personal loans. 

Paying online can be quite risky in the case of Bitcards, as debit cards can withdraw all the money from your bank account at once and it can take a long time to get back, but credit cards have every chance of making a correction. it happens. In case of error if you regularly spend money with credit card, it is also very easy for you to calculate the amount.

What are the Types of Credit Cards ?

Credit cards can be used for every need from shopping to paying electricity bills, the following are the types of credit cards in India.

Travel Credit Card - With the help of this credit card, you can avail discounts on all airline ticket booking, cab booking, rail and bus ticket booking and many more services. Every time you book a ticket, you get some points which you can redeem later.

Shopping Credit Card - If you wish to avail discount on purchases or transactions through this type of credit, you can shop online or offline at partner stores through which you can avail cashback, discounts. Coupons are also available.

Balance Transfer Credit Card - This credit card helps you avoid high interest or penalties, allowing you to pay off your current credit card debt. For this, you get a time of 6 to 21 months with a balance transfer credit card. However, to use it, you will also have to pay a balance transfer fee, which can be up to 5 percent of the total amount.

Fuel Credit Card - By availing fuel surcharge with this credit card, you can avail discounts on offers offered by petrol pumps. Plus, you can save a lot of money throughout the year by collecting extra points.

How does Credit Card Work ?

What basis do banks issue credit cards ? - A bank gives you a credit card only if you are able to repay the loan amount taken from the bank. The issuing bank sets the credit limit based on your credit score, credit history and your income.

Get 60 days to pay the money - If you don't pay your credit card bills on time, you'll incur a penalty, which will give you a debt-free period of 50 to 60 days between credit card bill preparation and purchases.

Through credit card you can make any type of payment through online mode like bill payment, bus ticket booking, train ticket booking, fee payment etc. You get bonus rewards for paying via credit card. Points will be earned, gift vouchers are also awarded.

Sometimes you are paying too much interest on the minimum credit card payment, if you look carefully you are paying the minimum but the principal is not working. If you pay the minimum amount due, you will have to pay 2 to 4 percent interest on the outstanding amount.

If you do not pay your credit card, you will be declared a defaulter, as well as your credit card will be blocked, bank can also take legal action against you for non-payment of credit card bill.

So friends, how did you like this article of ours, through this article we learned what is a credit card, in this article we have provided you detailed information about credit cards.

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