Why do we need credit cards? - Banking Info Everything You Should Know - Banking How

Credit card anyone?

The emergence of electronic age made almost everything possible for people. Determining and curing terminal diseases made convenient, reaching uncharted territories became a possibility, and most of all; everyday life of people is made easy by the technology. We now have more convenient stores, easier means of transportation and a variety of gadgets that makes work and pleasure almost effortless.
When it comes to finances, technology—through efficient banking system and services—has given people better alternatives and options on how to manage their finances. Among the so many financial management schemes that emerged, one alternative stands out among the rest—the credit card.

Credit card, especially to working people and those who live very busy lives, has become an ultimate financial “saviour.” More than just being a status symbol or an add-on to expensive purses and wallets, credit card has revolutionized the way people spend their money.

But, more than the glamour and the convenience credit card brings, there is much more to this card than most people could ever imagine.

Credit Card 101

Before indulging much into the never-ending list of the advantages and disadvantages of having a credit card, it is very important for people to first have a brief realization of what credit card really is in order for them to maximize its potentials.

In layman’s terms, a credit card is a card that allows a person to make purchases up to the limit set by the card issuer. One must then pay off the balance in instalments with interest payments. Usually, credit card payment per month ranges from the minimum amount set by the bank to the entire outstanding balance. And since it is a form of business, the longer the credit card holder wait to pay off his or her entire amount, the more interest pile up.

Since having a credit card is a responsibility, only those people who are of legal age and have the capability to pay off the amount they are going to spend through their credit card is allowed to have one. Actually, most of the adults in the U.S. use a credit card because this is very convenient compared to carrying cash or checks every time they have to purchase something.

It is also equally important to be familiar with the different types of credit cards before you begin to build up credit card balances and to avoid having a nightmare of debt. Since credit cards are indispensable to most consumers, it is a must that they understand the types of card that include charge cards, bank cards, retail cards, gold cards and secured cards. All of these types come in one of two interest rate options—the fixed and variable. Actually, it doesn’t really matter if you decide to have a fixed-rate credit card because the interest rate remains the same. Compared to variable-rate cards where rate may be subject to change depends upon the credit card issuer’s discretion, fixed-rate carry higher interest rates. Basically, credit card grantors issue three types of accounts with basic account agreements like the “revolving agreement” a.k.a. Typical Credit Card Account which allows the payer to pay in full monthly or prefer to have partial payments based on the outstanding balance. While the Charge Agreement requires the payer to pay the full balance monthly so they won’t have to pay the interest charges, the Installment Agreement, on the other hand, asks the payer to sign a contract to repay a fixed amount of credit in equal payments indefinite period of time. Another category of credit card accounts includes the individual and joint accounts where the former asks the individual alone to repay the debt while the latter requires the partners responsible to pay. The common types of credit cards available through banks and other financial institutions also include Standard Credit Cards like Balance Transfer Credit Cards and Low Interest Credit Cards; Credit Cards with Rewards Programs like Airline Miles Credit Cards, Cash Back Credit Cards and Rewards Credit Cards; Credit Cards for Bad Credit like Secured Credit Cards and Prepaid Debit Cards; and Specialty Credit Cards like Business Credit Cards and Student Credit Cards.

Now that you have an idea of how many types of credit card there is, it is now time to review your goals before applying for one. Some of the things you should consider are how will you spend with the credit card monthly, if you plan to carry a balance at the end of the month, how much are you willing to pay in annual fees if you have a strong credit history and is does your credit in need of rehabilitation. Once you have an idea of what you are looking to choose the right credit card for you by researching the information you need that will fit your basic needs. You may also review the credit cards you’ve research and compare them.

Shopping for a credit card?

Regardless of the type of credit card you choose, be sure to discuss your specific financial needs with your financial advisor or accountant before applying for any credit card. It is a must that you understand the benefits of having a credit card like safety, valuable consumer protections under the law, and the accessibility and availability of services. The most popular credit cards include Chase Manhattan Bank, Citibank, Bank of America, BankOne, American Express, Discover® Card, First Premier Bank, Advanta, HSBC Bank, and MasterCard Credit Cards.

Although having a credit card is synonymous to invincibility, this may also trigger a person’s thirst for material things and may lead to the temptation of buying something they don’t really need. A credit card bearer should always have in mind that having a credit card is a big responsibility. If they don’t use it carefully, these may owe more than they can repay. It can also damage their credit report, and create credit problems that are quite difficult to repair.

How does a credit card work?

When you choose to pay with a credit card and you hand the card to a cashier or submit your card number over a secure internet connection, the merchant you’re dealing with validates your account and whether the bank will allow the purchase to go through. If everything looks good, your purchase is added to your credit account. Many companies are involved with each swipe of a credit card, and money exchanges hands between all these companies each time a card is used. Merchants pay fees to accept credit cards, and eventually, the card-issuing banks receive part of this as revenue.

Once a month, the bank accumulates your credit card purchases and sends you a bill. The best option, and the only option I recommend, for dealing with that bill is to pay in full by the due date. If not, you have to pay a minimum amount, determined by the bank, to avoid extra fees.

Credit card application for starters

“Plastic money” is a term dubbed by the people of the world in reference to the wondrous item called the “credit card.” And at the rate, the economy is going and with the pace of life that we have right now, we want everything done the expressway. That’s why a lot of businessmen, young professionals, big bankers and even well-off students are lining up inside their trusted banks, credit card application in one hand and the need to have instant credit on the other.

Of credit, cards and credit card application 

Credit card applications have taken over the need to have cold cash and a lot of people are trading in their hard-earned green bucks for a shot of having the charge-it-card. But along with your credit card application is the responsibility that we are mainly unaware of. So when you are thinking about falling in line to get started with your credit card account and before you start filling up the fields necessary to get up and running with your credit card application know all the precautions and the countermeasures for you to be protected by the federal law. Credit card application, as we all know takes a lot of time with regards to the verification of the identity of the person on top of the credit card application. Because of the US Patriotic Act that requires further verification of anyone applying for anything on the United States, that includes credit card application, getting anything in the US has become quite a chore. But since the importance of having a credit card is a top priority in the US many are still willing to go to the immense amount of trouble that is coupled with it.

The importance of having a credit card is very imminent; take for example the average American. An average American from the middle-class bracket owns about eight to ten different credit cards and uses all of them at an average if once a day. With this number, it’s not surprising that there are about a hundred thousand credit card applications being processed in a single day. And the rate of credit card applications are still expected to rise within the next quarter. The need for credit cards and debit cards is for real and the market should be open for more credit card applications that are expectedly going to flood their way. There will be a great need for more people to look into the responsibility of educating other people on how and when to use their credit cards because it’s hard-earned greenbacks that we are throwing away when we buy online porno and junk like that only profit a few people. So whenever you’re ready to grab a pen and paper and get ready to fill up that credit card application form and take one step in the express charging the way you buy.

Most of the time, although your credit card application is mailed to that states that you have been pre-approved, you will still be asked to fill out a credit card application or the ‘acceptance form’. The reason behind this is the need of the bank or the company to verify the identification of the person they have sent the card to. Since most companies offer online credit card application, you may go online to fill out the form so the processing will be convenient and easier.

When filling out your credit card application, there are some important details that should be considered aside from your name and contact information like the query should you accept every offer or not, the possibility of hidden fees that can be quite expensive and the like.

The worth of a business credit card

Among the so many varieties of credit cards, one of the most underestimated is the value of a business credit card. Many people do not choose to apply for a business credit card because aside from having a definite target market— the business owners or business executives—it seems to be complicated to use. Although a business credit card has more requirements and has higher interests compared to other types of credit cards there is, contrary to the common conception, t can be very helpful if used properly.

What is a business credit card?

Basically, a business credit card is for the business people’s consumption. Compared to the regular credit card, a business credit card has a high limit plus low-interest rates. Depending on the manner of choosing, a business credit card may also bring a lot of automatic benefits.

Since it is targeted towards businessmen or those people who are heading towards building a business, a business credit card can definitely benefit these small businesses. A business credit card helps the budding business by extending payments while improving the cash flow. Aside from bearing the image of a dependable credit card, business credit card boasts of having detailed reports and giving quality customer service as its major trademarks.

Aside from having limits and low-interest rates, a business credit card provides many alternatives and numerous credit options for small businesses. A business credit card also caters to large corporations that are crafted to aid those people who are starting with their own business to grow while closely monitoring the baseline of credit.

Simplifying business credit cards

It really pays to go to the bank when one applies for a credit card to get the chance to answer all immediate inquiries. But since the business credit card is for business people who are always on the go, many business credit card issuers offer online applications for business credit cards.  When one applies for a business credit card, there is no need to visit the bank. There is also no need to wait in the queue just to talk to a bank representative. When you apply for a business credit card online, all you have to do is to select the business credit card option that would perfectly suit your small business or corporate credit requirements right from the comforts of your home or office. Aside from offering safe, secured, and simple processes that are designed help you take care of your starting business, most business credit cards online offer accessible features for the convenience of the business credit card holder like the online payment and reporting. Customized company logos and access to instant cash are also available online. Other business credit card online offers detailed reporting features for easy monitoring and access.

Most business credit card applications offer free fee for the first year and no pre-set spending limit or finance charges. Other business credit card offers a viable membership rewards program that enables the member to earn points towards travel, merchandise and other rewards for his or her business. Some of these business credit cards offer small businesses a line of credit up to $100,000 at a competitive APR as low as prime + 1.99% for both cash and check purchases; 100% of the line is available as cash and no collateral is required. The business credit card holder or customer might receive fee-free checks as well as a card to access the account. Everyday savings or exclusive savings, express approvals, no annual fee, up to 5 percent rebates on all qualified purchases, and 0% introductory annual percentage rate (APR) on purchases during the first half of the year of card membership are some of the great offers of most business credit cards.

Although the majority of the business credit card issuers offer great value deals, it is very important to research first what does your business needs. Whether your business credit card is meant for investing in inventory or just for payroll, it is significant to look for a flexible business credit card that can handle almost anything. Whether you opt to go directly to the bank or apply for a business credit card online, a number of premier business credit card suppliers are there to help you find the right credit card product as easy and convenient as possible.

Credit cards in India

Credit Card	Annual Fee	Key Features
HSBC Visa Platinum Credit Card	Nil	10% cash back up to ₹ 3,000 on minimum spend of Rs.10,000 within 90 days of card issuance
HDFC Bank Regalia Credit Card	₹ 2,500	Complimentary Priority Pass and Taj Epicure Plus Membership.
The American Express Membership Rewards®Credit Card	₹ 1500	Earn 1,000 bonus membership reward points on using card 4 times per month on transaction worth Rs.1,000 each.
SBI Card PRIME	₹ 2999	Welcome e-gift voucher worth ₹ 3,000 redeemable at Bata/Hush Puppies, Marks and Spencer, Pantaloons, Shoppers Stop and Yatra.com
ICICI Bank Platinum Chip Credit Card	Nil	1% fuel surcharge waiver on fuel transactions of maximum ₹ 4,000 at HPCL pumps.
American Express Platinum Reserve Credit Card	₹ 10,000	Get 11,000 Membership Rewards points as welcome gift.
HDFC Regalia First Credit Card	₹ 1000	Complimentary Priority Pass Membership giving access to 850+ international airport lounges.
Citi PremierMiles® Credit Card	₹ 3000	10,000 Miles on first spend of ₹ 1,000 or more made within 60 days of card issuance.
Standard Chartered Manhattan Platinum Credit Card	₹ 999	5% direct cash back on departmental stores and supermarkets spends.
SBI Card ELITE	₹ 4,999	Free Movie Tickets worth Rs. 6,000 every year

Apply for a Credit Card in India

Due to the rising demand for credit cards in the market, banks and financial institutions have made credit card application quite easy for the customers. You can apply for credit cards both online and offline.

Credit Card - Eligibility Criteria in India

• The eligibility for a credit card differs from provider to provider. However, the basic criteria are as follows:
• You should be at least 18 years old.
• Whether salaried or self-employed, you must have a regular source of income to pay back your credit card bills (minimum income bracket differs from one card to another).
• You must not have a bad credit history.
• Documents Required for Credit Card Application

The documentation requirement also varies from issuer to issuer, some of the key documents required to apply for a credit card are as follows:

• Identity and Signature Proof- Passport, PAN card, Driving License, Voter ID card, Aadhaar card, employee identity card in case of government employees.
• Address Proof- Bank statement, Rent Agreement, Voter ID card, Ration card, Passport, Driving License, telephone/ electricity/ water/ credit card bill or Property tax.
• Age Proof- Voter ID card, Secondary School Certificate (class 10), birth certificate, Passport, Aadhaar Card, pension payment order or receipt of LIC policy.
• Income proof for Salaried Individual: Latest 3 months' salary slips, Salary account bank statement for six months.
• Income proof for Self-employed businessmen/professionals: Latest IT Returns with computation of income and other certified financial documents along with business continuity proof.