What is a Credit Card?

A Credit Card is a financial instrument like other Bank Card in which the concerned bank which has issued it provides the credit limit. Credit limit is the maximum allowable limit pre-set in card that the card holder either can spend on various online purchase or even can withdraw cash from it depending upon the withdraw limit set.

The limit on credit card is set based on the applicant’s income level, credit score, credit history and their Debt Burden Ratio (DBR) means the repayment capacity.

The approval process of credit card is varied depending on the governing laws of the origin country. Credit card gives you the freedom on managing your monthly expenses if used so wisely. It helps you to manage your monthly expenses during the 2nd last or last week of the month when you run out of cash and the regular monthly income disbursement is yet to come.

Card holder can enjoy various benefit such as loyalty program while using it. Card holder can get Cash Up Loyalty point or Cash back on their spending. The cash up and cash back varies from the bank to bank policy. In addition to this, card holders also enjoy various discounts on different merchants such as ride sharing app, hotel, restaurants, transportation, lounges etc. It also provides access to various Airport’s lounges. All the benefit, discounts, cash up, cash back differ from bank to bank.

What You have to pay in order to avail Credit Card?

Generally, a credit card holder has to pay Joining Fee at first. Then in every year renewal fee or account maintenance fee and in case of cancellation, the cancellation fee is also applied. But with the immense competition among all the Bank and Financials institutions, the bank may waive any or all the charges that occurs. Some of the Banks and Financial institutions have offered a life time free credit card to its customers. THEREFORE, IT IS UPTO THE APPLICANT WHO WISHES TO APPLY FOR CREDIT CARD TO ANALYZE ALL OCCURING FEES BEFORE APPLYING FOR IT.

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