Q.Difference between a credit card and a debit card?
A. While a debit card acts as an instrument to withdraw money from your savings account or to make card-based transactions using the amount in your account, a credit card is a credit instrument that allows you to spend using the card and repay it later.
Q.Should I pay interest on all the purchases I make using a credit card?
A. No, you don’t have to pay interest on all the transactions. However, if you’re not repaying the due amount within the stipulated time, the unpaid due would attract interest along with all the new transactions, till the due amount is repaid in full.
Q. Can I use my credit card in other countries?
A.It depends on your card type. If your credit card is accepted globally, you can use it in other countries as mentioned by your creditor. However, a certain fee known as the foreign transaction fee will be charged for all the purchases made abroad.
Q.Difference between a VISA credit card and a Master Credit Card?
A.VISA and MasterCard are two leading payment gateway providers in India. Any credit card issued in India is either VISA-powered or MasterCard-powered or powered by any other payment network. From the cardholder point of view, there is no much difference. However, VISA and MasterCard may provide slightly different offers on each credit card.
Q.How many credit cards should I have?
A. The number one should own is not fixed. It depends on your financial ability and your spending behavior. However, ensure to manage all the cards properly. Use them responsibly, repay the outstanding on time and make sure none of them is affecting your credit score.
Q.How long does it take to get a credit card approved?
A. The banks typically state that they would take 21 days to disburse a credit card. However, depending on the applicant’s profile, availability of documents, verification checks, etc., it might also take a little longer than the stipulated time.
Q.What is a secured credit card?
A. A secured credit card is typically issued against a fixed deposit with the bank. The amount in the FD account serves as a security deposit in case the cardholder defaults on the credit card. Secured credit cards are ideal for those without any credit history and for those who are availing the credit card for the first time.
Q.What does 'minimum due' mean on a credit card statement?
A. The minimum amount due is the minimum amount a credit cardholder needs to pay in case he/she is not able to pay the total outstanding. It is typically 5% of the total outstanding amount on the card. Paying the minimum amount would save you from the late payment fee.
Q.Difference between credit limit and cash limit?
A. The credit limit is the total credit allotted for your credit card at the time of issuance. At any given point, you cannot spend beyond that limit.
On the other hand, cash limit is the maximum amount of credit available for cash withdrawal on the credit card. Typically, it’s a portion of the total credit limit on the card.
Q.If I make a late payment on my credit card, will it affect my credit score?
A. It depends on various factors – the number of days late, the number of instances and the amount due. Based on all this your credit card issuer would take a call about whether or not to report the same to the credit agencies. But once reported, it would certainly affect your credit score.
Q.Do credit cards offer protection against fraud?
A. Not all credit cards do, but there are quite a few credit cards that come with fraud liability protection cover.
If your card offers the protection, most of the fraudulent transactions that might happen on the card when it’s either lost or stolen will be covered. However, you need to intimate about the loss of the card immediately to the respective creditor.
