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quickmoneybee · 2 years ago

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Understanding the different types of credit cards in India before you pick

Credit cards in India emerged as a big alternative for bundles of cash in wallets in recent times. They are called plastic money. The security and convenience offered by cards are the reason for their popularity today. These types of credit cards in India play a key role in increasing the purchasing power of the user. The best part is the user enjoys an interest-free credit period until the due date. You are obliged to repay the used credit limit at the due date. Defaulting the timely repayment of the credit will penalize you with the late payment fee and interest rate as well. There is no pre-payment penalty while using these cards.

Why is a credit card a good idea?

The credit card is a proven alternative for bundles of cash in the wallet today. Using a credit card as a cash alternative keeps you worry-free about the cash in your current account. The right amount will be deducted from your credit limit towards the payment after you make a purchase, nullifying the chances of a wrong transaction. Many banks are benefiting the customer with reward points on each purchase. Making a big ticket purchase with a credit card will not only offer you convenience but also entitle you to cash-back rewards, miles rewards and much more.

How many types of credit cards in India?

Secured credit cards Money deposits back the secured credit cards as collateral. You can use credit card up to the relative credit limit. These types of credit cards are mostly used by people who have yet to establish their credit history. Fetching these credit cards is quite easy because the risk of issuing them is relatively low. Keep your spending relative to your credit limit in order to establish a strong credit score, which is important for fetching different types of credit cards and loans offered by banks in the future. Standard credit cards These credit cards are easy to understand, try these credit cards if you are using the credit cards for the first time. These cards hold revolving credit balances up to a certain credit limit, which differs from customer to customer depending on their credit profile. Once you repay the used amount at the end of the credit cycle, the credit limit is again available for your purchases. A penalty is levied on the outstanding balances at the end of the credit cycle. Rewards Credit Cards These types of credit card in India is a popular option among users today because they earn rewards while they spend. It can be in the form of cashback miles or travel offers. They also get a chance to earn reward points as a signup bonus, renewal bonus, etc. You can either redeem these rewards for cash or merchandise of your choice. If you are a frequent traveller, travel rewards cards turn out to be your priority because they earn you free flights, hotel stays and other travel benefits. Auto / Fuel Credit Cards Fuel cards turn out to be your option if you hold a vehicle that is used for long and local transportation. These cards reward you with cashback and a surcharge waiver on every fuel purchase. These accumulated reward points should be redeemed for refuelling. Balance transfer Credit Cards Most of the different types of credit cards offered today come with a balance transfer option. The benefit of using credit card balance transfer that are specially designed for the purpose is they come with a low introductory rate on balances for a specific period. You can make the payment of your old card balance at no/ lower interest rate for a certain period of time. However, there is a nominal fee for balance transfers through these cards. Student Credit Cards These types of credit cards in India cards are specially designed for students to help them establish a credit history. It would be easy for the student to get these credit cards through third-party service providers rather than applying directly. You may enjoy many additional features like low balance transfers and interest rates. Business/Corporate Credit Cards These business types of credit cards in India cards are designed to add great convenience to the business owner in managing the finances effectively. The manager can issue credit cards to the employees for making business transactions. As an additional benefit, the manager can get the name of the company embossed on it. Contactless Credit Cards Mostly, all types of credit cards today are designed with unique payment technology that allows the user to make the payment through POS terminals. You do not need to enter any PIN to make a transaction, so these cards are extremely secure. Subprime Credit Cards These different types of credit card credit cards are issued to people with bad credit. They have high-interest rates and fees. These cards are a good option to repair your bad credit Limited Purpose Cards As evident by the name, these cards can be used for a specific purpose only. They have low credit limits and low finance charges as well. Store cards and gas cards are a few examples of this limited proposed card. International Credit Cards International credit cards are for global travellers. These cards offer a great convince while making international purchases. You can keep away from the headaches of currency conversion, and it offers more security on your international trips.

Eligibility

Age18 yearsProfessionSalaried/ self employed with regular source of income to pay back billsCredit scoreGoodBank accountsSavings account on your name

Documents

DocumentsSalariedSelf- employedIdentity proofVoter ID/ Passport Copy/ Driving License/PAN card/ ID card issued by employerVoter ID/ Passport Copy/ Driving License/PAN card/ ID card issued by employerAddress proofPassport Copy/ Utility Bill (Electricity, Water)/ Rental Agreement/ Ration CardPassport Copy/ Utility Bill (Electricity, Water)/ Rental Agreement/ Ration Card.Income proof Latest 3 months' salary slips Salary account bank statement for six months. Latest IT Returns with computation of income and other certified financial documents Business continuity proof.

Aspects to look on for choosing a different types of credit card

Interest free period It is important that you know about the grace period when you use types of credit cards in India. The grace period is interest interest-free period after your billing cycle. Any purchase made within the due date remains interest-free. If the billing cycle is from 1st January to 31 January and the due date is March 1st, the period between the billing date and the due date is called a grace period. If you don’t repay the used credit by the due date, you will be liable to pay interest and other charges.

Interest Rate Interest rates on different types of credit card credit cards are high when compared to other types of loans offered by banks. Not only the outstanding balance but the purchases you make thereafter will also attract high-interest rates until the complete balance is paid off. Cash advances on credit cards will also have high-interest rates with no grace period. These banks will charge interest rates on the advances from day one till you pay off. Cashback If you are managing your monthly expenses through credit card purchases, these cash-back cards turn out to be the right option for you. Apart from benefiting from the regular discounts offered by the stores, you will get cash-back rewards on every purchase you make through cards. Our team has a piece of knowledge about different cards with cash options and will help you pick the right one as per your requirements. Discounted cards Before you apply for a credit card, our expert understands your purpose for applying for the credit card and suggests the right options available. If you are a loyal customer of a specific store, you can opt for the discounted cards offered by partnered banks. Other aspects Many different types of credit cards offer reward points programs to draw the attention of customers. You need to understand reward programs offered by the banks, which help you pick the cards that match your spending patterns. I Read the full article

#alltypesofcreditcards #differenttypesofcreditcardsinIndia #typesofcreditcardsinIndia #whatarethedifferenttypesofcreditcards

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quickmoneybee · 2 years ago

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NEW Credit score regulations RBI you should know

Many people are taking the help of loans to address essential necessities, like purchasing a home or car or addressing an emergency. You must be one among them if you are reading this article. Different types of loans are available to address different needs of the people. Whether you are taking the loan to purchase a home or car and it can provide financial aid to tackle some emergency, lenders need your credit score to determine your creditworthiness before applying for the loan. The New credit score regulations RBI help you stay informed about your credit score.

What is a credit score?

This is a handy tool for the lender to determine the borrower's creditworthiness before approving the loan. Impressive credit scores will increase the chances of getting a loan. The person's payment history and spending habits determine one’s credit score. Most banks consider a credit score above 750 a benchmark to approve a loan. You can have free credit checks at many websites online. If there is a shortfall in your eligibility for the required home loan, you may be required to join your spouse as an applicant. The CIBIL score of the person is a determinant factor for deciding both the loan amount and interest rate on the loan.

New Credit score regulations RBI

Notify customers for each credit report enquiry Each time you apply for different loans with the banks, they inquire about your credit score with the major credit reporting agencies to check your eligibility and decide other loan terms for you. You will not be informed about this until the bank makes the decision regarding your loan application. Multiple hard inquiries about CIBIL score may have a negative impact on your credit score, which further troubles your ability to get a new loan. The New Credit score regulations RBI to notify a person each time a credit inquiry is made at credit bureaus either through SMS or Email. How does it help borrowers? Being informed about a number of credit inquiries helps you make informed decisions while applying for a new loan. You should apply for the loan only when you have a strong need for funds and know that you have a good credit score to be eligible for the loan. Notify the reason for the request rejection Each and every transaction related to debt handling is reported to major credit reporting agencies. You have every right to request any information regarding your credit report, like your current score, correction of misrepresented information and more. The New Credit score regulations RBI says If the credit institution has rejected any of your requests, they have to notify the reason for rejection. How does it help borrowers? Few borrowers have a good practice of checking their credit reports before making a new loan application. You may request the credit institutions to act against any mispresented information. Knowing why the request was rejected helps you take the right action before making a loan application. Free credit report every year The credit companies must provide free credit reports to their customers annually. The respective links should be displayed on their websites. You can also get a free credit score check at multiple websites online. How does it help the borrower? Gaining access to the credit reports every year for free reduces the number of credit inquiries. You can also take the right action to address any red flags in the credit report before applying for any loan. You can also take necessary actions to improve credit and keep off unwanted rejections meanwhile.

Notify default information to customer before credit bureaus

The third Credit score regulation RBI is If the customer is about to default on the credit, the bank has to notify the same information to the customer before informing the credit bureau. The default information has to be shared via SMS or e-mail. The loan providers have to appoint nodal officers to address all credit score-related queries. How does this help the borrower? Many people end up defaulting on debts when they have multiple debts. The reason could be a lack of management than funds. Notifying the customers about their probability of defaulting on the loan will help them address the issue and keep off the defaults before it is informed to credit bureaus. Credit information companies are penalised for late reply As per the new credit score regulations RBI, the credit information institution, has to resolve the complaint within 30 days of receiving it. Otherwise, they are penalised Rs.100/- a day. The total duration is shared between lending institutions and credit bureaus as 21 and 9 days, respectively. The banks will bear the penalty if they fail to inform credit bureaus within 21 days. The credit bureaus will pay the charges if they fail to inform customers within the rest 9 days. How will it help the borrowers? The new credit score regulations RBI about penalties will foster quick resolution from both banks and credit institutions. Even the customers who are waiting for the resolution can find a quick way out to solve their problems regarding credit scores.

How can your credit score prove creditworthiness?

Payment history This is the major component of the credit report that determines your creditworthiness. If you are prompt in the repayment of EMIs and payment of the credit card bills, it will positively impact your credit score and surge up. On the contrary, if there are delayed or missing payments of credit card bills or loan EMIs, it will negatively impact your credit score. By this, the lender will be able to analyse your creditworthiness in repaying the loan on time. You can access the related information through a free credit score check at different sites online. Unserved debt Due importance is given to unserved debt when the lender is going to sanction the loan. If you have a chunk of unserved debt, like a number of loans or outstanding bills on various credit cards, it is going to impact your credit score negatively. On the contrary, if the loans in your account are less than the income and you have no credit card bills pending, you will have a positive impact on your credit score. This will let the lender know your creditworthiness as he will be able to analyse the risk of defaulting on the loan before it is approved.

Duration Extended credit will have a positive impact on your credit score. As long as there are no dotted lines about the mismanagement of the loan, it will undoubtedly contribute to raising your credit score to more than satisfactory levels. Credit mix A credit score is also impacted by the credit mix you have. The lender needs you to have the right credit mix in different categories of credit. Though it is not going to bring a huge difference in your credit score, having the right mix under various sections of credit will go a long way, providing your creditworthiness to the lender when you apply for any loan in future. When you have good creditworthiness, the lenders are more interested in offering the loans to you. You can even get the loan at lower interest rates when your creditworthiness is good. Credit score plays a vital role in determining your creditworthiness, which is essential for the lender to approve the loan. Read the full article

#freecreditscorecheck #majorcreditreportingagencies #newCreditscoreregulationsRBI

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quickmoneybee · 2 years ago

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NEW Credit score regulations RBI you should know

What is a credit score?

New Credit score regulations RBI

Notify default information to customer before credit bureaus

How can your credit score prove creditworthiness?

#freecreditscorecheck #majorcreditreportingagencies #newCreditscoreregulationsRBI

0 notes