Credit Card FAQs

Credit Card FAQs

1. What is a Credit Card?Credit cards are an essential financial tool that enables its holders to make purchases and have the luxury of paying back the amount later. A credit card comes with a bank-approved credit limit, and the holder must pay back the amount due on the due date, which is mutually decided by the bank and the holder.
2. How do credit cards work?A credit card gives you a line of credit and you can use this to make balance transfers, all kinds of purchases, and cash advances. You will have to pay back the amount by the date specified by the bank. When you use a credit card, you have to keep in mind the minimum payment to be made every month by the due date.
3. What is credit card limit?This is the maximum amount that one can spend on their card. When you have a high limit for the credit card, it allows you to spend more and this will help your credit scores.
4. Can I get a credit card online?Yes, you can apply for a credit card online, once you go to the website of your preferred bank, or you can conveniently compare options and apply for one.
5. What is the minimum credit score for a credit card?A credit score above 650 is ideal to be able to get a credit card.
6. Can I get a credit card without a job?Even if you do not have a job and have a pretty substantial cash inflow into your account every month or so, you are eligible for a credit card.
7. Can I get a credit card in one day?Yes. Due to the online application system, your credit card application could be approved in one day. However, you will not get the physical credit card in one day.
8. Do credit cards come with any airport lounge benefits?Yes, a lot of credit cards come with access to domestic and international lounges at airports.
9. Are there any benefits of having a credit card?Yes, most credit cards come with a reward point system, where you earn a point every time you spend a said amount of money. You can then redeem these points for vouchers, cashback, or air miles.
10. How can I get a credit card for the first time?If you already have a credit history, you can check your eligibility, choose a card that suits your lifestyle needs and apply for it. If you do not have a credit history, you can opt for a secure credit card usually offered against fixed deposits.
11. How many credit cards should I have?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.
12. Can I get a credit card with a bad credit score?Credit scores above 650 are generally deemed as good for credit card approvals. Scores below 650 are usually considered poor, and approval may be subject to providing security (collateral such as fixed deposits).
13. Which is the best and easiest way to apply for a credit card?The best and the easiest way to get a credit card is to apply for it on a their websites. You can compare the features, benefits, fees, interest rates etc. and then choose a card that best suits your needs.
14. Should I pay interest on all the purchases I make using a credit card?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.
15. What does ‘minimum due’ mean on a credit card statement?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.
16. Do I need to pay a processing fee for a loan against credit card?Yes, banks do charge processing fees for loans against credit cards. However, you need to pay a very nominal amount as a processing fee.
17. How many days will it take for a Credit Card to be renewed?Credit cards are automatically renewed towards the end of the expiration period. A renewed card with a new expiration date is usually a month before the existing card’s expiration.
18. How long are Credit Cards usually valid?Credit cards issued in India are usually valid for a period of 3 years.
19. Does my credit card number change when I renew?The renewed card usually has the same number as your expired card, but the new card’s CVV number is different.
20. Can I use my credit card in other countries?It depends on your card type. If your credit card is accepted globally, you can use it in other countries as mentioned by your card issuer. However, a certain fee known as the foreign transaction fee will be charged for all the purchases made abroad.
21. If I make a late payment on my credit card, will it affect my credit score?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.
22. Can a credit card be reopened once it is closed?Yes, you can always reopen a credit card account if it is closed. How long ago you closed the credit card account will be taken into consideration by the credit card issuer. However, keep in mind that there is no guarantee that the issuer will allow you to reopen the account.
23. Do I have to pay the bill if I don’t use my credit card?Almost all credit card issuers will not charge you any fee if your credit card hasn’t been used for months. It is unlikely that they will charge you an inactivity or dormant account fee. Inactivity fee is generally charged on deposit accounts, but this will depend on the credit card issuer.
24. Do I need to use my credit card every month?You do not have to use your credit card every month, but you need to use it often to avoid the bank from labelling it as an inactive account.
25. What are the charges for withdrawing cash using my credit card?Different banks will charge different fees. Typically, the charge will range from 2.5% to 3% of your transaction amount. This will be subject to a minimum amount of Rs.250 to Rs.500.