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What Is a Credit Card? And its advantages

What Is a Credit Card? And its advantages
What Is a Credit Card

What Is a Credit Card? and its advantages

Let’s have a look at the credit card and its life story!

“Credit card-  A Plastic card which gives you the purchasing power even though you are in low debt”

It is a plastic card, which lets you borrow money/funds for your purchases from issued financial institutions (mostly banks) with a pre-approved limit.

The credit card limit will be decided by the issuing financial institution based on your credit score and credit history.

We should pay back the borrowed money within the grace period of ~40 days(varies based on the financial institution) otherwise you’ll have to pay interest.

Check the below things before applying:

Annual fee :

Most of the credit card has an annual usage fee. It varies based on the Bank and card privileges.

Interest charges:

If we delay or fail to pay the card bill on time, there will charge interest on the borrowed amount. Please pay the bill on time to avoid the charges.

Late payment fees:

If there is any delay in bill payment, banks will charge late payment charges.

Add-on card charges: 

Many banks provide add-on cards to our relatives, friends by collecting their identity information(few docs).

Over limit charges: If you do the transaction for more than the limit that you have banks will charge over-limit charges.

Card replacement charges: If you lose the card and applying for the replacement bank will charge card replacement charges.

International transaction charges:

If you travel internationally, we should first check with our card provider before using it.

Rewards type: Every card will be having some kind giving back program in the form of points or some rewards.


We can make a transaction now and pay it off in smaller amounts over time by converting the transaction into EMI(equated monthly installments).

It gives you purchasing power.

You can use when you see some emergency with funds.

It builds a credit history for you (CIBIL score).

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