A credit card is a quick spend tool which allows you to spend money whenever you want. Now, credit cards have become an integral part of your life and it is used to pay almost all the bills. The reason why the credit card is loved by many citizens is it allows you to spend now and pay later.
Use your credit card wisely or else it will land you in a debt trap. In this blog, we will be discussing everything you need to know on a credit card.
A credit card is a plastic money issued by financial institutions like banks. Your credit card has a credit limit and you will be allowed to spend up to that limit. The credit limit on your credit card will be decided based on various factors such as your credit score, age, income and so on. You need to pay back the amount spent, using your credit card within a stipulated time period.
In case of debit or ATM cards, you need to have an account with the bank. But, in the case of credit cards, it is not mandatory to have an account with the bank. You can avail a credit card from any financial institution which issues these cards.
See Also: How To Close Your Credit Card Account?
Applying for a credit card is a simple process and you can apply through both the online and offline routes. If you want to apply for a credit card offline, you need to visit the branch of the institution from where you wish to avail the credit card. You have to fill up the credit card application form and submit it along with the relevant documents. After all the necessary verification, the credit card will be issued.
To apply for a credit card online, you have to fill up the credit card application online and upload the necessary documents. After applying for the credit card online, the concerned person from the institution will visit your place and collect the documents.
You are required to furnish certain documents while applying for a credit card. The documents include Income proof, Identity proof, PAN card, address proof and IT returns.
After you apply for a credit card, the financial institution will check your credit score to decide whether you are eligible to receive a credit card or not. Your credit card application will be rejected if you have a poor credit score.
Use your credit card wisely to avail maximum benefits. Do not spend unnecessarily with your credit card as doing so can lead you into a debt trap. You should develop the habit of paying your credit card bills in time. In case you miss paying your credit card bills in time, you will be charged late payment fees. Not just that, you will be charged interest on the outstanding balance.
Credit cards offer a lot of rewards and cash backs. Make sure to avail these on time. Also, develop the habit of checking your credit report every month, to see if there are any suspicious transactions. In case you find any transactions which are not done by you, report them to the bank or credit card company immediately.
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