What is a credit card -what is a minimum payment of credit card-Technical Ajay

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Friends, what is a credit card, it is a question that is in the mind of every new person who is thinking of getting a credit card, so what is a credit card, how to get it, how to manage it, the benefits and losses. Know about credit cards in detail.

As the name itself suggests, credit means loan or borrowing.

So a credit card is a card that is a loan of yours, but this loan is given to you for your shopping and services.

A credit card is a loan given to you by the bank in the form of a plastic card that you can use for shopping, services – like Paying electricity bill can be done or booking a flight ticket.

You can also do shopping both online or offline. You can also use a credit card like an ATM in an emergency, for cash withdrawal.

The credit card your bank gives you has a credit limit, your bank pays your expenses up to that limit to your vendor or shopkeeper, and you pay back your bank on the due date according to the billing cycle.

you can pay back your billed amount, without any extra charge, but if you have not paid the full amount on time, then the bank takes many types of charges from you.

According to your bank, you have an interest free time of 45 to 50 days to pay your entire amount which you have spent.

Let’s understand what a credit card is in easy language-

You often go to the shopkeeper of your neighborhood to bring your daily necessities.

After a few days you get identified with that shopkeeper, and he starts lending to you too.

How much credit the shopkeeper will give you every month depends on a lot of things.

And whatever credit the shopkeeper gives you, you have to repay it every month after your salary arrives.

And in the same way, this cycle keeps going every month.

The same thing happens in credit cards too. Your bank gives you a credit limit, which you can spend on your important work.

Every month your bill is calculated, and you have to repay the entire money back to the bank within 20 days.

what is a credit card
what is a credit card

Who can get a credit card?

If you are a salaried person, or you have a business that you file income tax, then you can apply for a credit card, or the bank can also approach you if your credit profile is very good.

How much credit limit can I get?

How much credit limit your bank will give you depends on your salary or how much income tax you have filed.

Generally, your bank gives you a credit limit of 3 times your monthly salary. If you do business, your bank will give you a limit after looking at your annual income.

In some cases where you do a business that does not come under the purview of income tax, or you are a student, you can still take a credit card, but in this case, the bank will ask you to make a fixed deposit.

Against which the bank will give you a credit card, and your credit limit will be 80 percent to 90 percent of the fixed deposit.

What is the annual charge of a credit card?

All banks that offer credit cards are charged annually. Before choosing a credit card, you should know the two types of charges that appear on the card-

  1. Joining Fees
  2. Yearly  Fees

Joining fees can range from Rs 500 to Rs 1999, but there are many types of cards with the bank, which have different joining charges.

And if you pay a little attention, it will easily save a one-time charge. All banks offer to forgive joining fees.

Yearly fees can also range from 500 to 9999 annually, you will be charged yearly, please clear your bank.

There are offers on many cards that you can save your yearly charge by spending a certain amount on the card.

so you can save a lot of money by taking complete information about both these charges because only after the correct information you can You will know which card is right for you.

Should I take a credit card or not?

Credit card, as you can understand, will cover almost all the expenses of your month – such as grocery, medicines, traveling, child education and other expenses.

and your reward points are also received by doing credit card, which you Can convert to cashback.

But there can also be a lot of credit card losses, such as excessive spending without much needed and the biggest loss occurs when you do not clear the entire amount on the due date of the card.

Banks charge interest if you have not paid the full amount of your card at that time it is very high. In some cases, it also goes up to 40 percent yearly, including fine and GST, etc.

So if you are taking a credit card, then think carefully and use it more wisely. make sure that you are paying on full dues time.

Therefore, what is a credit card, understand this thing well before taking a credit card.

So it is important that you get complete information about credit card – a credit card can be very useful for you if you have complete information.

you can subscribe to my page and youtube channel so that you can fully credit the credit card Understand and save thousands of rupees.

Benefits of credit card –

  • Today almost every place has online transactions, so it is more convenient. and you can your credit card.
  • Many online transactions support only credit card, you cannot use your debit card.
  • You have a card for any kind of emergency, which will be used in almost all your work.
  • You can earn reward points by using your credit card regularly, which you can use for cashback or other useful products, which will be your extra savings.
  • You can avail of many offers through your credit card which is available for both online and offline shopping and services.
  • After using the credit card properly, you have a good credit profile, due to which banks easily give any loan (home loan, car loan) if you have need.
  • Many banks also offer instant document free personal loans to credit card users, which you can find in your account in one click from home, there is no need to go to the bank.

Drawbacks of Credit Card-

  • The biggest disadvantage that has been seen with credit cards is that it promotes unnecessary expenditures. Buying goods that are not used much, or are not an agent, yet credit card users are found buying them.
  • The interest rate and the fine are very high.
  • There may be a problem in the condition of online fraud.
  • If you have not chosen the right card, then you may have to pay a huge yearly fee.
  • If you have not made your card payment correctly then your entire credit profile (Cibil score) will be ruined, after which you will find it very difficult to get any other loan.

Which bank to take a card from?

Almost all banks offer credit cards, private and government banks – but when it comes to the credit limit, private banks offer you more credit limit.

You can get the right type card of the right bank, knowledgeable about the offered credit limit, joining fees and yearly fees.


How credit card banks make money-

Now a question that may bother you is that when credit card lenders give you money for shopping and services for 45 to 55 days without any interest.

then what benefit do the bankers have, how the bank money Earn. Typically bankers earn money through your card in the following ways –

  • Every shopping you do, one of the parts does not go to your shopkeeper and goes to the bank, like if you bought 100 rupees then about 1 rupee or 1.50 rupees go to your card provider bank.
  • Your credit card person charges you a yearly fee, which is forgiven many times if you have done more transactions on your card.
  • If you do not pay your credit card bill on time, then the bankers charge a lot of fine and interest. The interest rate is very high, about 30 to 40 percent yearly, which is much more than personal loans.

You can watch this video to understand the credit card in easy language. Click here

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How Credit Card Billing Cycle Works?

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