A credit card is a payment card issued by a financial institution that allows cardholders to borrow funds to make purchases. The cardholder is then required to repay the borrowed amount, along with any applicable interest charges, by the due date.
Eligibility criteria typically include factors such as age, income, credit history, employment status, and residency status.
Commonly required documents include identity proof, address proof, income proof, and sometimes employment proof.
The credit limit is the maximum amount of credit that a cardholder can borrow on a credit card. Credit limits are determined by the card issuer based on factors such as the cardholder’s income, credit history, and repayment capacity.
The interest rate, also known as the Annual Percentage Rate (APR), can be either fixed or variable, depending on the card issuer and the type of credit card. Interest rates can vary based on factors such as the cardholder’s creditworthiness and prevailing market conditions.
Common fees associated with credit cards include annual fees, late payment fees, over-limit fees, cash advance fees, and foreign transaction fees. It’s essential to review the card’s terms and conditions to understand all applicable fees.
Credit cards often offer a variety of benefits and rewards, including cashback on purchases, rewards points that can be redeemed for merchandise or travel, access to airport lounges, travel insurance, and concierge services.
Credit cardholders can manage their accounts online through the card issuer’s website or mobile app. This allows them to make payments, view statements, track transactions, and dispute charges quickly and conveniently.
Missing a credit card payment or failing to pay the full balance by the due date can result in late payment fees, increased interest charges, and negative impacts on the cardholder’s credit score.
If a credit card is lost or stolen, cardholders should immediately contact the card issuer to report the loss or theft and request a replacement card. This helps prevent unauthorized charges and protects the cardholder from potential fraud.
