How Does Credit Card work?
When you applied for instant credit card application, you enjoy instant approval credit card. The next step following credit card instant approval is that you need to know the working of an instant approval credit card. The credit card working is very simple to understand. Using instant credit card online, you can go for online purchase. After using a credit card, you need to repay the outstanding amount at the end of every billing cycle. You can easily swipe the credit card at merchant stores and authenticate the transaction by entering their PIN. For some of the credit cards, you are not required to enter the PIN. While going for instant credit card online payment, you must be sure that the website is well secured. Also, you must know that after credit cards instant approval, a maximum credit card limit in India is set based on the credit card eligibility criteria. Moreover, you must be capable of repaying the credit card bill. If you spend over and above the maximum credit card limit in India, then you will have to pay certain penalty charges.
Types of Credit Card
Following are the types of credit cards available-
- Lifestyle Credit Cards
- Shopping Cards
- Airline Credit Cards
- Business Credit Cards
- Corporate Credit Cards
- Co-branded Cards
- Reward cards
- Fuel Credit Cards
- Entertainment Credit Cards
- Dining Credit Cards
- Golf Credit Card
- Utility Credit Cards
- Travel Credit Cards
What is Secured Credit Card?
A secured credit card is secured by fixed deposits which act as a collateral when you open the account. The amount you deposit equals the credit limit. The deposit reduces the risk of the bank. When you pay the credit card bill on time, you will get back the fixed deposit. But in case you fail to pay, the bank will use the fixed deposit. The secured credit card helps in improving your credit score and apply for the regular credit card in the later stage. An individual with a poor credit history can opt for this card to rebuild their credit. When you start repaying this credit card bill on time the credit score increases. Customers with good repayment behavior enjoy the advantage of an increase in credit limit without an additional collateral deposit.
Eligibility Criteria for Credit Card
The eligibility criteria to apply for credit card online varies for different bank and different types of credit card.
Following are the credit card eligibility criteria that you need to fulfill for credit card fast approval-
- Your minimum age for apply credit card online is 18 years. Though it can be 21 years for some cards.
- You need to fulfill credit card apply minimum salary. Also, you need to have a stable income source.
- Minimum credit score of 750 or more is necessary for a credit card online approval.
- You must have Indian citizenship or non-resident Indian (some credit card providers in India offer its credit card to NRIs).
- Based on the employment type, you can apply for credit card for self-employed and salaried.
Documents Required to apply for Credit Card
Following are the set of documents which are required for credit card apply online-
- ID Proof
- PAN card
- Aadhar card
- Voter ID card
- Driving License
- Address Proof
- Rental Agreement
- Electricity Bill
- Telephone Bill
- Income Proof (For Self-employed)
- Business Continuity Proof
- Statement of recent ITR (Income Tax Returns)
- Balance Sheet or Audited Profit and Loss Statement
- Income Proof (For Salaried)
- Appointment letter
- Salary Certificate
- Recent Salary slip/s
Top Financial Institutions Offering Credit Cards
Based on credit card eligibility criteria, top credit card providers in India offers the best credit cards. FreEMI offers top credit cards from the leading financial institutions-
- SBI Credit Cards
- ICICI Bank Credit Cards
- HDFC Bank Credit Cards
- Yes Bank Credit Cards
- Bajaj RBL Credit Cards
- IndusInd Bank Credit Cards
What are Credit Card Numbers?
On every best credit card, there are 16 digits. These numbers are coded to identify the issuer and prevent any kind of fraud. When you apply for credit card online, you get instant credit card number.
The very first digit of the credit card signifies the system-
- 6- Discover Card
- 5- Master Card
- 4- Visa Card
- 3- Travel or Entertainment Card
The structure of the credit card number varies by the system. For ex- Carte Blanche and Diners Club starts with 38 and American Express card numbers starts with 37.
The 2nd and the 3rd digit, the 2nd digit up to 6th digit, the 2nd digit up to 5th digit or the 2nd digit up to 4th digit is your bank number. This depends on whether the 2nd digit is 1,2,3 or other than that. After the bank number, the digits up to the 15th digit is the account number. The 16th digit is the check digit.
From the 2nd digit up to the 6th digit is the bank number. Then from the 7th digit to the 15th digit or from 7th digit to the 12th digit is the account number. The 16th digit or 13th digit is the check digit.
The 3rd and 4th digit signifies the type and currency. The 5th digit up to the 11th digit is the account number. The 12th digit up to the 14th digit is the card number. The 15th digit is the check digit.
Some important terms related to Credit Card
Line of Credit
A sort of arrangement between the bank and the credit card holder which allows him/her to borrow a maximum amount of money. To meet any financial need, you can use the line of credit to access fund until he does not exceed the maximum credit card limit in India. While using the line of credit, customers pay interest only on the amount they use and not on the whole credit line. They can adjust their repayment method i.e, either paying minimum monthly payments or paying the entire outstanding amount at once.
Revolving Credit is a line of credit which allows the credit card holder to access the fund up to the credit limit. It is a kind of arrangement where you can withdraw the loan, repay, redraw again any number of times until the arrangement ends. Under this revolving credit, the cardholder can use the credit card repeatedly. The available credit amount increases as it is repaid and decreases as it is borrowed. The cardholder repays the amount he withdraws plus the interest charged on it.
Revolving account is a type of credit account where you the cardholder does not pay the outstanding amount in full every month and allows him for varying credit availability. Here, you have to repay between the minimum amount and the full amount. When you don't pay the balance in full at the end of the monthly billing cycle, interest will be charged on the remaining balance amount. And the total amount will revolve into the next month.
Credit Card Balance
It is the amount of money that you owe to the concern credit card provider in India. The credit card balance can be positive, negative or zero. It is positive if you owe money to the credit card company. It will be negative if the payment is greater than the balance. And it is zero if the balance is fully repaid. To avoid high-interest rate and manage the credit card efficiently, you should go for zero credit card balance. The credit card balance includes- interest charge, recent purchases, unpaid balance, annual fee, late fee or any other fees. Your every payment reduces the balance and your every purchase adds up to the balance.
Minimum Payment Amount
Minimum payment amount is a small portion of the outstanding balance. It is the minimum amount you need to pay for your credit card bill to avoid any kind of penalty charges. So, you need to pay at least the minimum amount by the due date of each month after the monthly billing cycle. If you do not pay the minimum payment amount, then your credit score will be affected adversely.
Payment Due Date
When you have a balance on your online credit card, you need to do monthly payment towards the balance, This payment should be made within a certain specified date known as payment due date. If you delay your payment beyond this due date, then the credit card issuer can charge penalty and also can report a late payment to the credit bureau.
Grace Period is the time gap between your monthly billing cycle and your payment due date.If you make your payment within the grace period, then no interest is charged. But if you fail to pay your credit card bill within the grace period, then interest will be charged on the entire outstanding amount and also on the new purchases made using the online credit card. Generally, credit card providers in India grant a grace period of 20 to 60 days (varies from bank to bank) in India. Most banks in India does not grant a grace period for cash advances on your online credit card. The factors which affect the credit card grace period are- your credit card balance, the payment due date and the closing date on your credit card statement.
Credit card limit is the maximum purchase limit set by bank or the credit card company on a particular credit card. It is the maximum amount that a cardholder can access within a monthly billing cycle. The credit limit is determined depending on the factors like- monthly income, credit score, purchase habits, loan repayment history, and other criteria. The credit limit varies for different customers. If your monthly obligation (through bank account statement) is less, then you can expect a high credit card limit. But if your monthly expense is high, then you should expect a low credit card limit (doubting your ability to spend and pay).
There are 2 types of credit card limit.
- Total Credit Card Limit- It is the maximum credit limit that you can avail on your credit card.
- Available Credit Card Limit-It is the due amount which is the difference between the total credit card limit and the amount paid using the credit card.
Fees charged on the Credit Card
Following are the different types of fees that are charged on the best credit card-
- Annual Fees
After online credit card approval, an annual fee is charged as the cost of owning the credit card. On an annual basis, this fee is added to your bill. If you opt for the best credit card apply online, then no annual fee is charged.
- Late Fees
You will be charged a late fee if you fail to make the minimum due payment in time. So, it is advisable to pay your bill on time or mail your cheque before the due date.
- Other fees
The credit card providers in India often charge a range of other fees which include- returned cheques or charges for exceeding the credit limit.
EMI on Credit Card
You can choose to pay credit card bills through EMI (Equated Monthly Installment). Some banks offer 0% interest on installment payment. This means you have to pay the principal amount through monthly installments within the selected repayment period and no interest will be charged. Also, some banks charge a low-interest rate on the EMI of the credit card. In this case, the cardholder has to pay the EMI which includes the principal amount and the interest rate, until they clear off the debt.
Interest Rate charged on Credit Card
The interest rate is computed as the Annual Percentage Rate (APR) which depends on the credit card type. Your credit score determines the APR. In case the monthly outstanding amount has not been repaid by the cardholder, then banks charge a certain interest rate % on the borrowed amount. If you are comfortable in regular monthly repayments, then you can opt for a credit card with travel loyalty programs and reward programs, which have a higher APR. But if you want payment flexibility, then you can opt for the credit card with low APR. The credit cardholders enjoys an additional feature of the interest-free period from 20 to 50 days, offered by banks.
Apply Credit Card Online
Now availing instant approval credit cards have become very easy. You can go for an online credit card application which is a very flexible and convenient process. Let's have a look at the process of apply credit for credit card online-
- Firstly, you need to visit freemi.in for an online credit card apply.
- Then you need to click on the 'Credit Card' button.
- Then you need to fill up some basic details like- phone number, mail id, address, monthly income, etc for the next step.
- Lastly, you need to click on 'Apply Now' button for online credit card apply.
Key points to remember for new Credit Card User
In order to enjoy the facilities of best credit cards, here are some key points to remember for a new credit card user-
- To get the complete information on a credit card, how to apply credit card online, the interest charges, terms of the agreement and other fees, you need to read all the terms and conditions carefully.
- Try not to buy the expensive things which you cannot afford, even after having easy access to a credit card.
- In case of any misuse of your online credit card, you should always keep the details of your card and the card issuer's number with you.
- Always try to pay your credit card bills in time. For any delayed or failure payment will affect your credit score adversely.
- To improve your credit score, try to spend less. Always try to limit your purchases within 50% of the credit limit on your credit card.
- You should keep a track of your credit card transactions to compare with your monthly credit card statement. Any kind of discrepancies should be reported, as they can be reversed.
Benefits of Credit Card
In our discussion, we have explained credit card apply, best credit cards, free credit cards, apply credit card online. Now, we will discuss about the benefits of credit card-
- Improves credit score
- Waive fees for international payments
- Debt consolidation and saves money on the existing balance
- Interest free days to pay off your credit card bill
- Safer than carrying liquid cash
- Meets any kind of emergency
- Complimentary extras
- Add-on cards for family members
- Cashback, reward points and other exciting offers