Credit Card, “A Helping Hand”-MoneyMindz

By | 23/02/2019


       A credit card may seem like just another tool to help you make purchases, but it can be much more. When used responsibly, a credit card can help you build a good credit history, allowing you to get loans at favourable interest rates, cheaper insurance and even a new cellular plan. Credit cards can also help you earn rewards on your everyday purchases and protect those purchases in case of theft or damage.

A credit card can be a lot more useful than your debit card if you use it the right way., Best On-Call Financial Advisory Portal guides you by providing the basic idea of a credit card in order to help you in your finances.

A credit card is a secure and flexible way to pay and can be a good way to spread the cost of major purchases. It is one of the most divisive products among all the financial tools available. It depends on how confident your card provider is that you’ll pay it back.

If you pay off the bill in full each month, you won’t pay interest on what you’ve borrowed. If you make cash withdrawals though, interest is usually charged on a daily basis from the day you take your cash.

What is a credit score?

A credit score is a number assigned to individuals to determine their abilities to repay loans.

Eligibility criteria of credit card

  1. The applicant should be at least 18 years old.
  2. The applicant should be a salaried or self-employed also having a regular source of income to pay back the credit card bills on time.
  3. The applicant should have a savings account in his/her name.
  4. The applicant should not have a bad credit history.

Documents required

  1. Duly-filled credit card application form
  2. Passport size photographs
  3. The identity of Proof such as a copy of PAN, Aadhaar, passport, etc
  4. Proof of Residence such as a copy of Aadhaar, passport, utility bills, driving licence, etc
  5. Latest salary slips
  6. Form 16
  7. Bank statements
  8. If self-employed, you may be asked to submit documents such as income proof, statement of accounts, proof of business, etc
  9. If you are applying for a student credit card, you will be asked to submit a copy of your student ID card

Types of credit card

  1. Rewards Credit CardsA rewards credit card, as the name implies, earns rewards on your purchases. Some cards will pay out at a flat rate of 1%-2%, while others will give an extra bonus in predetermined spending categories. Rewards are paid out in a variety of forms, including checks, gift certificates, airline miles and free hotel stays.
  2. Low Interest Credit Cards: Low interest (or low APR) credit cards are best if you carry some credit card debt month-to-month. Depending on your financial situation, you can choose a card with a reliably low ongoing interest rate, or one that has no interest for an introductory period.
  3. Balance Transfer Credit Cards: Balance transfer cards are meant for those who already have a lot of credit card debt. They allow you to shift your debt from your current card to a new one, and give you a period of 6-21 months to pay it off interest-free. There is usually a one-time balance transfer fee, though, of up to 5%.
  4. Secured Credit Cards: Meant for those with bad credit, secured credit cards require you to post collateral when you open your account, usually equal to or greater than your credit limit. With a secured card, you can build up your credit score and eventually move on to an unsecured card.


The main thing to remember is that a credit card is a huge responsibility that can spiral out of control really quickly if you are not paying it off each month. Treat it as though you must pay it off each month and you shouldn’t get in too much trouble.

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