Credit cards could be boon or a bane depending on how you decide to use them and with so much confusion around getting your first credit card with half knowledge could be dangerous
Credit cards could be boon or a bane depending on how you decide to use them and with so much confusion around getting your first credit card with half knowledge could be dangerous.
But worry not, we are here to help you out with some frequently asked questions regarding your credit card bill, due date and how having a one would impact your credit score or let's just say financial reputation.
First of all let's discuss the concept of credit card limit:
What is a credit card limit?
A credit card is your credit limit which is the maximum outstanding balance you can have on your issued card at a given point in time without receiving a penalty.
The credit card limit plays an important role in keeping a good credit score and if manages properly, it helps you out in staying out of debt.
Who decides your credit limit?
When you apply for a credit card, your bank keeps a track of your income, current debt level, and credit history. Just in case you have a bad credit history of skipping or late payments, you may be approved for a low credit limit to start.
What is a credit score?
We know we need a good credit score and our credit limit would help in the same but what is a credit score? CIBIL Score is a three-digit numeric summary of your credit history. The score is derived using the credit history found in the CIBIL Report (also known as CIR i.e Credit Information Report). A CIR is an individual's credit payment history across loan types and credit institutions over a period of time.
How to boost your credit score?
In today’s world, banks rely heavily on credit scores and credit reports to estimate the credit worthiness of a customer. When it comes to sanctioning loans, overdrafts and credit cards, banks check the applicant’s credit score. Credit scores range between 300 and 900, the latter being the highest. Anything above 750 is considered favourable by banks and lending institutions. How does paying off your credit card dues early help in boosting your credit score? When you make an early payment, it reflects well on your financial status. It shows that you are in control of your debt and financial matters and can clear the credit card bill well before the due date. Any credit card bill payment made in advance or by the due date will help keep your credit score up.
How to avoid interest charges on credit card bill?
If you have funds to clear your credit card dues, it is better to do so. This will ensure that you do not miss the payment due date. Therefore, you will avoid any charges in interest and late payment fee. If you miss the due date or pay only the minimum due, your balance will accumulate interest. Any subsequent purchases on your credit card will also accumulate interest from the date of purchase. You also lose out on your interest-free period.
How to deal with the credit limit?
If you pay your bills in advance, you free up your credit limit and thus can make more purchases. This is useful especially if you anticipate making big purchases on credit card. If you plan on buying a smartphone or a TV, for example, having a higher credit limit will allow you to charge these purchases to your credit card. This ensures your credit card is not declined for lack of credit limit. Many people apply for credit cards online as the process is faster and easier, and this allows them to purchase the big-ticket items they desire quickly. Furthermore, with EMI options, credit cards have become a much sought-after financial product.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "credit card, credit card bill, credit card due date, CIBIL score, credit score, loans, SBI, home loans, car loans, insurance, fi")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}