Here Are Some Important Things To Keep In Mind When You Own A Credit Card

There are quite a few people who believe that credit cards are a way to get free cash, but the reality is quite the opposite. You are required to pay the money back with interest and within a certain timeframe.

Do not mistake credit cards for debit cards, surprisingly a lot of people do, when you own a debit card, you need to open a bank account and link it to the debit card and when you use the debit card you are using the money that you have saved in your account. But when you utilize a credit card you are basically obtaining money from the bank, but with the promise that you will return it within a certain time period and with interest.

If people use credit cards in a sensible way then it may benefit them in a great way, but if you don’t use them properly then it is a different situation altogether, if you end up borrowing and not paying back then you may end up in debt and it is bound to reduce your credit score which is very important.

Credit bureaus are informed about your credit payment history by the financial institution. Furthermore, credit ratings are quite important to have because they affect your ability to get a loan, banks will always take look at the ratings to determine if you can pay back the borrowed money or not. So make sure you pay your monthly credit card bills and moreover remember that different financial institutions have different payment terms, like, ICICI Credit Card Payment terms are different from HDFC Credit Card Payment Terms.

Benefits Of Credit Card

There are several benefits of using a credit card, here are some of them

  • If you happen to be taking a break from working, you can always use a credit card for paying your bills only if you’re sure that you will pay the borrowed amount back.
  • There are several gifts and rewards to earned when you’re using a credit card for purchasing goods and services
  • Quite a few financial institutions offer insurance with travel.
  • If you have a good credit history and you apply for a loan, your loan will be approved quickly and lower rates of interest will be applied.
  • Using a credit card is very convenient, you can use it to purchase anything you want and you can even use it to pay for online purchases, but do that only if you can pay back the money in time with the agreed upon interest. But you cannot withdraw cash from ATM machines using a credit card.
  • Only a few credit card issuers will provide you with an option of LOC (Line Of Credit), with this feature you can withdraw money from the ATM machine but the interest rate may higher and there may be no grace period provided.

But just because it has benefits that do not mean that you should take undue advantage of them because if you do it won’t be beneficial to you. You should be responsible when you’re using your credit card. You should make your payments on time if you don’t know how to pay credit card bill, look it up on the internet you will find several guides on the subject.

Credit Card Fees: India

There are certain fees involved with credit cards in India,

Joining Fees

Although a lot of credit card issuers may not have joining fees, it is good to know it is.

Joining fees is associated with you getting a credit card. This is the fees you pay when you want to obtain a credit card.

Annual Fees

Several credit cards are associated with a yearly fee, you are expected to pay that fee on a yearly basis. This is not the same as every bank, it differs from bank to bank.

Interest Rate

This is one of the primary ways through which banks make money, interest rate. You are charged a certain rate of interest when you use a credit card. But remember if you have a good credit rate then the rate of interest will be lower and if you have a poor credit score it will be quite the opposite, you will have to pay a higher rate of interest. The interest rates vary from 1% to 3% in India.

Credit Card: Minimum Payment

In simple terms, the minimum payment is the minimum amount of cash that you have to pay if you can’t clear the entire amount at one go. The remaining amount is then carried forward to the month after, but the rate of interest in most cases would be higher.


  • It could help you make payments on time and that may help you increase your credit score.
  • You don’t have to pay penalties if you make partial payments.


  • If you do not make sure you pay your debt as soon as possible, or else you may get caught up in a non-stop loop of repayment.
  • When it comes to the minimum payment you do not have the option of a credit period which is interest free.

Credit Cards: How They Affect Your Credit Scores

Credit cards are one of the major determinants of your credit score as it basically shows how to handle your debts. If you make your monthly credit card payments on a regular basis and on time, then you will have a high credit score and there are several benefits of having a good credit score, for instance, if ever apply for a loan then the likelihood your loan application being accepted and approved it more.

But you cannot enjoy this privilege if you have bad credit scores and history. You get bad credit scored and history if you do not make your payments on time and if you exceed your credit limit.

If you close your credit card account, there are chances that your credit score may decrease.

Your credit scores can be hurt by 30% if you have a history of late payment.


These are some of the important things you should always bear in mind when you use a credit card. Responsible use of a credit card is crucial and if you are irresponsible when you use it, it can cause a lot of problems for you. So always make sure you choose the right type of credit card (secured credit card, unsecured credit card, reward credit card, student credit card, or many more), and when you do choose a credit card read through the terms and conditions thoroughly.

Make sure you make your monthly credit card payments on time and ensure that you do not exceed the set credit limit rather stay well below that limit. This way you can be sure that you will maintain a good credit score. As mentioned above, good credit scores can help you get loans approved quickly and easily and with lower rates of interest. If you have poor credit scores, then it only becomes difficult to get your loan approved, and even if it does you will be charged higher rates of interest which may not be financially beneficial to you.

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