I have seen my daughter manage her Credit Card very well.
She ensures that she gets full value of the benefits promised.
She goes through the fine print carefully.
Pays before the Due date.
Keeps track of the Reward Points accruing to her, en-cashes them in time.
Selects products/out lets where she will get the Best Buy.
She is loyal to a particular Credit card.
I may add the following points as well.
Do not leave the card to a waiter or gas Station Attendant to effect payment.
Personally handle the transaction and see that the Decoder comes to normal settings before you leave.
Do not enter the ATM’s when it is crowded; if possible enter when it is empty.
See to it that the ATM Screen flashes Home Screen before you leave.
Ask for balance statement only if you must.
Never leave your balance slip in the ATM kiosk.
Now read on for Professional advice.
Still, the fine print of how to use credit cards remains a mystery for many. Every year, hundreds of credit card users complain about being charged excessive fees or about receiving abusive calls if they haven’t paid their credit card bills for a long time. Complaints from credit card usersreportedly topped the list of grievances handled by India’s central bank between 2009 and 2010.
Banks and card issuers give users all the information they need in the “terms and conditions” that come with the cards. But consumers tend to overlook the fine print and largely rely on what the credit card salesperson tells them at the time of purchase. And they are unlikely to draw full attention to the many catches, preferring to focus on the positives of owning a credit card instead.
Ultimately, it’s up to the credit card users to know what they are getting into. Here are five things you should know about your credit card that you are unlikely to hear in a sales pitch:
The long list of fees: Understanding the credit card statement seems to be a major hurdle, said Jairam Sridharan, head of consumer lending and payments at Axis Bank in Mumbai. “I don’t understand how you calculated the interest or fees’…this is the most common problem people face,” he said. So make a point of finding out what all the charges are in advance.
If you are offered a “free card” or one with no annual fees, make sure the fee doesn’t kick in after the first year or two. It’s also a good idea to find out whether there are joining fees and how much you’d have to pay for late payment charges, cash advance charges (applicable on withdrawals from an ATM), and charges for spending more than your credit limit.
Some of the highest fees are charged when you don’t pay your credit card bill in full by the due date. You may have to pay an interest of up to 42% on the unpaid amount, plus a service tax of 10.30%. You may also lose your interest-free period for the next cycle if you haven’t cleared all your bills in time.
In case you haven’t even paid the minimum amount due per month to the credit card company late payment charges will be levied. These are typically 500 rupees ($10.5) to 600 rupees foroutstanding amounts of 10,000 rupees to 20,000 rupees. For greater amounts, the fee is higher.
If you use your credit card to withdraw money from the ATM, you may have to pay your credit card company or bank 3% of that amount, or a minimum of 300 rupees ($6.3), plus interest.
Why your credit card matters for your car loan: Did you know that your chances of getting a home or car loan depend on your credit card usage? If you didn’t, now you do.
Here’s why: The credit card usage of individuals in India is tracked by an independent agency that prepares a “credit score” for each individual. This score is basically a snapshot of your credit worthiness, a high score showing that you are highly likely to pay back your loans and a low score that you are not. The credit score, drawn up by the Credit Information Bureau India Ltd., is based on factors like how promptly you pay your credit card bills and how many cards you have. Consistently late payments or too many cards would result in a lower score. The credit score ranges from 300 to 900 and is constantly reassessed.
“When you apply for (home or car) loans, your Credit Card Information Report and your score are very critical elements and indicate your financial discipline,” said Arun Thukral, managing director at CIBIL.
To keep your score high, “avoid spending closer to the credit limit,” said Parag Rao, a senior executive and head of the credit card division at HDFC Bank Ltd. “A credit card should not become a means of financing your day-to-day finances,” said Mr. Rao.
As a business owner, you should understand the importance ofcredit card processing or a merchant account. It doesn’t matter whether you operate your business in a physical location or over the internet, your customers want to pay you with credit and debit cards. For internet based businesses, however, if you don’t accept credit cards you may as well not bother. Who wants to go through the hassle of mailing a check or money order when buying something online?
Here are some general tips to help you avoid problems with your merchant account or payment processing providers:
Setting Up a Merchant Account
Most online business owners use online merchant accounts to process credit cards. Do not wait until you need to process a credit or debit card to set it up because it can take a few days before your new merchant account is usable. Online credit card processing is generally faster to set up than traditional bank merchant accounts, but it’s rarely instant, and you want to be prepared.
Review and Understand Your Credit Card Processing Fees.