Complete information about Credit Cards

Are you planning to apply for a credit card? Are you wondering on how to deal with your credit card? This article mainly dealing with credit cards (individuals) will help you out from these situations.

What is a credit card?

Credit card is a card issued by a bank to its customers to utilize the credit provided by the bank for a certain period of time. If the due amount is not repaid within the said time, the bank will start charging a small interest on the due amount. A credit limit is applicable to every credit card. It varies from person to person and is decided on the basis of the financial condition or on the earnings of a person. One can purchase only up to his credit limit. Credit cards can be used at stores having a swipe machine and also for online purchases.

How does a credit card differ from a debit card?

As the name says, when we are using a credit card, we are just making use of the credit given to us by our bank. The credit utilized by us has to be repaid within a certain period of time or else the bank will charge us interest on the due amount. In case of debit cards, we are using the balance available in our bank to purchase various stuffs; hence we are neither indebted to anyone nor have to pay any interest. The advantage with Debit cards is that we do not have to carry money along with us always and make our purse or pocket bulge out; instead we just have to carry a card. This keeps us free and we do not have to be afraid of theft of money. Even if our debit card is stolen, we can immediately lock it by calling our banker. We can do the same procedure even if our credit card is stolen.

What are the advantages of having a credit card?

There are many advantages of having a credit card. Some of them are listed below.
  • It enables us to purchase or to meet our necessities even when we do not have money with us.
  • Certain credit card allows its user to get a loan up to a fixed amount. This varies from bank to bank.
  • Today unlike olden days, we depend too much on the internet to buy things we like. In such cases we can't pay cash directly, instead we have to use a credit card, debit card or e-cash.
  • We get the option to pay back the amount spend in installments and it will be interest free. These are certain offers given by some banks for a certain period. It may be applicable for say 6 months or one year on the purchase of gold or electronic equipments.
  • Credit cards of certain banks enjoy discounts and other benefits at selected stores.
  • Some bankers, in-order to encourage their customers to use credit cards, gives points against the amount spend on each purchase. When the points reach a certain level, you can redeem it for gift vouchers.

What are the documents required to obtain a credit card?

There are various documents required to obtain a credit card. However these requirements vary from bank to bank. If you have an account with the bank from where you are trying to get a credit card, then you may not have to produce any documents. Some banks insist that the customer need to have an account there to issue a credit card whereas in some banks you can get a credit card without opening an account with them. The basic requirements are listed below.

  1. Application Form : Every customer planning to get a credit card must obtain an application form from their banker and duly fill it up with your signature. In case if you do not know how to fill it up, the sales person at the bank will help you out. In certain cases, you just have to sign the application form and give it to them so that they will do the rest and fill up the application form.
  2. ID Proof : ID proof such as passport, driving license (of the country you stay), or any other ID related to the country in which you are staying such as Ration card, Aadhar card, PAN card etc must be produced in original along with a copy of it. The number of copy required might vary from bank to bank; sometimes the bank themselves will get copies of the ID. You just have to produce the original ID for verification and the bank will not take it for long. On expiry of your ID, you need to renew it and notify your bank about it. They will require a copy of your renewed ID then.
  3. Salary Certificate :Most of the banks asks for salary certificate (original, in your company letter head, signed and stamped) to be produced in-order to verify your monthly income. This is done to determine your maximum credit limit and to ensure that you are capable of paying off the amount utilized. Normally the credit limit given will be twice or thrice the salary of a person. May be after years, due to loyalty and being a good customer, banks might increase your credit limit.
  4. Bank Statement : When your salary is not been transferred to the bank from where you are planning to get a credit card, they might ask you t produce last six months salary statement or the state of last three months. Providing a salary certificate might be a substitute in certain cases.
  5. Photograph : Photographs of the customer will be required to file in the records of the bank. These days banks do accept scanned copies of photograph too, but they will have to see you in person and verify that it is your photograph. The number of photographs required varies from bank to bank. Some banks will accept photos with color background whereas some may insist to produce photographs taken in a white background. Some banks do not even need a photograph.

Tips for Credit Card Users

Having a credit card has now become a prestige thing and moreover it would be right to say that credit card has become a necessity to live in the present era. There is lot of benefits for having a credit card but at the same time, we should not just blindly get one without knowing its merits and demerits. There are many tips and security measures one has to follow in-order to make the best out of your credit card.

  1. The first steps is to check with your banker and the concerned sales person on what are the do's and don'ts related to your credit card. Ask him for the interest rate, credit period, loan available, credit limit etc associated with your card. Ignorance of such things is not at all an excuse.
  2. Never leave your credit card unattended or do not give it to a second person how much ever you rust him/her. The credit card number, expiry date, name on it along with the cvv number mentioned on the back of the card can be used for online purchase, hence one has to be really careful. Due to the increase in number of such threats, some banks have introduced a password system too. Only if you enter the password, you can make an online payment/purchase. It is better to go for such banks.
  3. After receiving your credit card, you will be requested to activate it. When activating, you will have to create TIN (Telephone Identification Number) and PIN (Personal identification Number) number. Normally TIN and Pin will be 4 to 6 digits long. Never create an easy PIN or TIN such as your date of birth etc. If you enter digits such as your D.O.B, vehicle plate number, 1111, 00000 etc, it is easy for others to guess. Therefore be cautious and create hard to guess TIN and PIN numbers. Note it somewhere otherwise you might forget it. Do not note it down in your mobile as anyone using your mobile accidently can get it. Never write it down in the credit card itself as in case you lost your credit card, the person getting it will get your PIN and TIN number too.
  4. One has to be extremely careful when handing over your credit card details through online or through telephone. Check for the authenticity of the website and only then share your credit card details with them. None of the banks asks their customer for their credit card details over phone or through mails, hence beware of fake calls and emails.
  5. In case of emergency, you might have messaged or mailed your credit card details to your near ones, be sure to delete the message or mail immediately after sending it. Ask the person on the other end also to delete it after using the details.
  6. Never use the email account you have shared with the bank for unnecessary purchases over the internet and for joining various sites. It is always better and safe to maintain a separate email account for your banking needs. You might receive e-statements to that account. In case you are subscribing for statement via postal mail, either file it after use or destroy it.
  7. Some people engage in fraudulent activities by obtain credit cards from various banks. For the time being they may survive but later on, one day they will be caught. Hence do not indulge in such practices.
  8. It is always better to have a single credit card. Having too many credit cards will confuse you and you may forget the due date of one and will end up in paying interest. If you are not using a credit card for a long period, then it is better to cancel it as you always have an option to get a new one whenever needed.
  9. Every banker provides certain credit period to its customers. Know your exact credit period and due date well in advance. It is always advisable to pay off the credit on or before the due date or else it will pile up along with interest charged. Finally you will find it difficult to pay off the entire amount.
  10. As soon as you get a credit card, ask your bank for mobile banking facilities. Once you register for banking facility, your bank sends you SMS on every purchase from your credit card. If you have not made any of the purchase and still you get a message from your bank, then you can immediately call up your banker and ask to cancel the particular purchase. Never delay as your delay can make the transaction effective.
  11. It is always better not to use your credit card details to purchase stuffs when you are using a public PC like in internet cafes and so on.


From the above article, you might have got an idea about what exactly a credit card is and what all are to be done immediately after obtaining a credit card. Be careful with your card and always feel free to call your banker in case of any issues or doubts.

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Author: KVRR08 Sep 2013 Member Level: Gold   Points : 4

Credit card is a convenience while going out of station. Instead of carrying cash, the credit card can be used to pay our expenses at the lodges, restaurants and shops. The main advantage is the credit period given by the banks. The payments can be made without interest provided the payment is done in time. As pointed out by the author, the credit cards are useful when we have no money and some purchase has to be made. The credit card is to be used judiciously for essential purchases. Any extravagant purchases result in getting into unnecessary loans and subsequent interest to be paid.

The credit card gives credit for 20 to 50 days depending upon the date of purchase. The purchase made in one month are billed and sent to the card holder for payment. The amount is to be paid by twentieth of the next month. For purchases made on first of the month will get a credit period of 50 days and the purchases made on the last day of the month get 20 days credit.

The author has clearly given the procedure for obtaining a credit card and the documents required. The tips given are very helpful.

Author: Syed Rizwan09 Sep 2013 Member Level: Gold   Points : 2

Hi Chitra,

Thanks for sharing this useful article. Now that I have got cleared with lot of confusions regarding credit card and I have left with one question for you now. Do banks charge for these credit cards like yearly or monthly? If yes, how much that would be. And is there any way to get rid from banks charging us for credit cards?

Author: Chitra09 Sep 2013 Member Level: Gold   Points : 4

Thank you K.V.Raghava Rao for adding your points to the article.
@ T Syed Rizwan, Nice to know that you got a clear idea about credit cards from this article. Yes, there are certain banks which charge a annual fee for its credit cards. The rate charged by each bank varies. But now due to competition many banks do not take a annual fee. There are no monthly fees charged by any banks. When you are applying for a credit card, go for the one which has no annual fee. Check with the sales person well in advance and find the bank which provides credit cards without annual fee. Hope your doubt is cleared.

Author: Ashok Goyal14 Sep 2013 Member Level: Gold   Points : 5

The users of credit card can make online payments to clear the outstanding dues under the credit card. Never withdraw Cash from ATM machines through credit cards as cash withdrawal is subjected to heavy charges. Even online payments from one credit of a Bank to another credit card of another are subjected same cost of charges as applicable for withdrawing cash. Clearing outstanding dues under credit cards after due dates is also subject to very high interest rates and scales down the credit card holders score rating in CIBIL. Having too many credit credits also adversely affect the credit history of the owner. The comments are added to make further value addition to the article for the readers of ISC by ISC team of members.

Author: K Mohan15 Sep 2013 Member Level: Platinum   Points : 4

This is the very useful article shared by the author and which focuses some important points to be remembered while knowing what is debit and what is credit card. Surely I think having a credit card is more safe for dealing with cash transactions as one need not carry the cash which is risky in metro cities. But what I feel that those who are having the credit cards have proved time again that they start purchasing more goods and services in the garb of paying for the same later. I think most of the card holders have become spend thrifts after their buying spree.

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