Credit Card FAQs - Get Answers To All Your Questions

If you're thinking about getting a credit card, make sure you understand how they function first.

In this "Credit Card FAQs" post, we have tried to answer the most common credit card questions to solve your queries and help you make the right choice when applying for a credit card in India.

#1 How Do I Choose a Credit Card?

One thing that many people find confusing is finding the right credit card that fits their needs and requirements. The best way to find the right credit card yourself is by focusing on what you are looking for in a credit card. This streamlined approach will only help to make a better decision when selecting a credit card.

Let’s say, for instance, suppose you are a person with no Credit history under such circumstances opting for a secured credit card would be the right choice. Similarly, if you tend to use your credit card every once in a while then opting for a no annual fee credit card would be a better option.

In case you find it hard to pay your outstanding credit card dues on time, you can apply for Cashback credit cards in India as they might help you get a percentage of your spending back.

#2 How Much Time Shall it Take to Receive my Credit Card?

You can apply for a credit card online or by visiting the nearest bank branch. You can get instant approval from the bank on your card application when you apply online. Your credit card shall be delivered to your registered address as mentioned in your application form.

It may take up to 7-10 working days to deliver your credit card. Besides that, you shall be required to generate a PIN to activate your credit card. You can generate this PIN via Internet banking or by visiting the nearest bank branch.

#3 What is Add-on Credit Card?

Add-on credit cards are issued to the individuals directly related to the primary cardholders. The credit limit of the primary credit card is shared amongst the add-on cardholders. Generally, banks tend to offer up to 3 add-on cards on a primary cardholder’s account. The add-on credit card is issued to family members of the primary cardholder including the wife, parents, siblings, and children.

#4 What is a Credit Limit and How to Increase the Credit Limit on My Credit Card?

A credit limit is a predetermined limit assigned to your credit card by the bank. You can not spend beyond the set limit stated by the bank. If you exceed this credit limit set by the bank, then in that case you shall be charged with an over-the-limit fee on your credit card.

You can increase the credit limit on your credit card by requesting the bank. The bank shall review your account and check whether you are eligible for a credit limit enhancement.

# 5 Can I Use My Credit Card for Foreign Transactions?

Yes, you can enable or disable international transactions on your credit card account. When you use your credit card for international transactions you shall be charged a transaction fee of 3.5% on your foreign spending. Mostly, banks roughly charge a transaction fee of 3% to 3.5% on international spending. However, many banks charge lower transaction fee-based upon the credit card variant.

#6 Can I Use My Credit Card to Cash Withdrawal?

Yes, you can use your credit card to make cash withdrawals on your credit card by visiting the nearest bank ATM. Most banks charge a cash advance fee of 2.5% on the withdrawal amount. Moreover, banks do not offer an interest-free period on the cash advance. Therefore, you shall be charged with interest on cash withdrawals using your credit card.

#7 How are Credit Cards Different from Charge Cards?

A Credit Card allows you to borrow money, and make payments later with interest. Credit Cards come with a preset limit beyond which you are not allowed to spend, whereas the charge cards do not have any assigned limit you can simply add up funds to your account and use it accordingly. You are not charged with any interest and are not required to make any repayment on a prepaid card.

#8 Can I Avail Myself of a Credit Card with a Poor Credit Score?

Yes, if you are an applicant with a reasonably low credit score, you can apply for a secured credit card. Secured credit cards have loose eligibility criteria and help you build credit. Alternatively, you can also apply for an add-on credit card to build credit. Hence, you can opt for these options if you have a poor credit score.

#9 What Would Happen if I Fail to Pay my Outstanding Credit Card Bill?

In case, you fail to make your credit card bill payment on time, you shall be charged with a revolving interest on the outstanding due amount. In addition to this, you shall also be charged with late payment. Default payment shall also affect your credit score adversely. Hence, it is recommended to make timely credit bill payments to avoid any negative effects.

#10 What is the Minimum Amount Due?

The minimum due amount is the minimum amount the cardholders are required to pay before the due date to avoid any interest or late payment charges on your credit card. Normally, the minimum amount due is computed at 5% of your total outstanding amount due. By paying the minimum amount due on your credit card, you extend the outstanding amount over a longer period.

#11 How Can I Pay My Credit Cards Bill?

There are various methods to pay credit card bill to opt for online or offline method as per your convenience:

1) Internet Banking: You can use the internet banking facility offered by the bank to pay your outstanding credit card bill. You need to register for the internet banking facility to pay your credit card bill.

2) Cheque: The customers can also pay their outstanding by dropping a cheque after entering the required details at a nearby bank branch

3) NEFT/RTGS: The customers can also use the NEFT/RTGS facility to pay their outstanding credit card bill payments. You need to register to transfer funds from one bank to another

4) Cash: Alternatively, you can also pay your credit card bill via cash. The bank charges a cash processing fee from the customers to pay their credit card bills.

Bottom Line

These are some of the Credit cards FAQs to help you provide all the necessary information related to your credit card account. You can use this information to compare and apply for the right credit card that helps you fulfill your financial needs.