Know you Card
It is important that we know about our credit and debit cards.
- Your credit card gives you credit only if there is no outstanding on your card. What this means is if for example you have spent Rs 5000/- on your card and the minimum payment asked by the bank is 250/- (5% of outstanding), and if you pay anything less than 5000/-, you do not enjoy any credit. This applies even for the first purchase that you have made. If you do not pay in full by due date, then you pay interest @ 3 to 5% per month. Period.
- If you withdraw cash on your credit card, all subsequent purchases attract finance charges ranging between 3 to 5% per month.
- If you do not pay at least 3 days before the due date, the bank will most probably say that the payment was not received in time and slap you with late payment charges and penalty.
- If you have any outstanding on the credit card, the insurance will not stand good till all payments have been made.
- If you do not cut and return a credit card that you do not require, the bank will continue to charge you annual fees and late payment fees and penalties till they feel fit. In the process your credit history will be tarnished because you will be reported as a defaulter with the credit bureaus.
- If you get a credit card which is free for life-time, carefully read the terms, the terms may require that you use the card at least once a year and also within 30 days of getting it.
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