Handle your credit card with care
By Ankit Sharma
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Understand the product

If you are a first-timer to the world of credit card, spend some time in understanding the product. Read the term and conditions, when you apply for a credit card. It could be a laborious process but something that has to be dealt with, to protect yourself from any rude surprises that might be in store for you in times like this.

Ask your friends and relatives who use these cards about their experience. At the time of availing a card, get a complete grip on the payment terms, billing cycle, interest rates and add on offers. A good understanding of these can help you plan purchases in a manner that can get you maximum free credit days. Before swiping your card, ask yourself if you really want to buy that product and make a rough calculation of how much credit limit you are availing.

Adhere to dates mentioned

Stick to the dates mentioned. The best thing to do would be to make full payment for the bills, though in tight situations ensure that you have paid at least the minimum bill amount. In such cases, the credit card issuer will charge interest for the balance due for payments.

Switch to online mode

Billing and non receipt of card payments are the most common problems that credit card users face. It can be avoided if customers switch to online mode for various facilities such as subscribing for e-statement as it removes the difficulty of having to wait for the snail mail.

Similarly instead of dropping the cheques at drop boxes and collection centres, avail online payment modes such as PayBill and BillDesk. These transactions are time saving and make life easy for customers and banks.

Most credit card issuers offer the facility of the cash advance feature (where you can withdraw cash against your card just like an ATM. If you hold a separate ATM card, avoid resorting to this option until you are in dire need of cash as these transactions carry very high interest burden (25-30 percent per annum).

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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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