Handle your credit card with care
By Ankit Sharma
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Credit card as a convenience product

Credit cards have blessed us with enormous comfort. Buying something expensive is no longer a problem and the shopping experience is quite tension-free since you do not have to worry about the cash being stolen.

For some, it is luring as it offers rewards and cash-back while for others it is a cool status symbol to flash a credit card. There is a wide variety of credit cards available with various issuers. For instance, gold and platinum cards are meant for premium segment customers with high incomes and net worth. These premium segment cards have higher credit limits and also benefits like travel insurance but these come with higher charges.

Co-branded cards are increasingly becoming popular. They carry the name of a third party, which may be a retail outlet, airlines and so on. They usually benefit you when you purchase products from the third party e.g. ICICI bank-ebony credit card.

A credit card is a useful tool, only when managed judiciously but a lurking danger if you mismanage it. Due to the ongoing financial crisis, banks have become wary of the credit card defaults and are changing their credit limits, doing away with interest free periods and charging higher interest rate on the credit borrowed. ICICI bank has recently announced that it will block all the cards of its customers in case they default even on a single one.

Therefore it becomes imperative for you to handle your credit card with utmost care.

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(Comments Posted : 1) Post Your Comments
1. Getting the first credit card is one of the most important events in your life. It signifies your entry to credit. Most of us spend a lot of our time with credit cards without knowing much about them. We take you through your credit card and introduce you to the world of convenience and complexity.
Know your credit card:
Finance charges -The finance charges are paid based on a monthly percentage interest rate ( say 2.65 %) and is calculated on a average daily balance method for most credit cards in India. This is calculated by the simple formula:
Interest calculated = (outstanding amount x 2.65% per month x 12 months) * no. of days / 365
Then there is a thing called the grace period, during which the balances on credit card do not attract finance charges provided the credit card holder repays the entire outstanding amount in full with the monthly credit card bill. The grace period varies with every credit card and usually is between 20 to 60 days. It is also called the interest free period.

Also, your credit card payments have impact on your credit score. So make sure you use it wisely. You can check your credit score for free by visiting
Ishika (Posted: Oct 15, 2015)
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