What are Features of Credit Card?
The 11 of import features of blogspot.com//search?q=what-is-credit-card-meaning-definition">credit card are depicted inwards the picture below.
The top dog characteristics or features of credit carte are listed equally follows:
- Alternative to cash.
- Credit limit.
- Aids payment inwards domestic together with unusual currency.
- Record keeping of all transactions.
- Regular charges.
- Grace catamenia or grace days.
- Higher fees on cash withdrawals.
- Additional charges for delay inwards payment.
- Service tax.
- Bonus points.
- Gifts together with other offers.
Now let's hash out each characteristic of credit carte 1 yesteryear one.
1. Alternative to cash
Credit carte is a improve option to cash. It removes the worry of carrying diverse currency denominations to pay at the merchandise counters. It is quite slow together with agency fast to usage a credit carte rather than waiting for completion of cash transactions.
As an alternative, credit carte helps a cardholder to go anywhere inwards the the world without a ask to comport an ample amount of cash. It also reduces the possible guide chances of coin theft together with gives its user a consummate peace of mind.
2. Credit limit
The credit cardholder enjoys the facility of a credit boundary assault his card. This boundary of credit is determined yesteryear the credit carte issuing entity (blogspot.com//search?q=what-is-credit-card-meaning-definition">bank or NBFC) solely after analyzing the credit worthiness of the cardholder.
The credit boundary is of 2 types, viz.,
- Normal credit limit, and
- Revolving credit limit.
Normal credit limit is park credit given yesteryear the banking concern or NBFC at the fourth dimension of issuing a credit card.
Revolving credit limit varies alongside the fiscal exposure of the credit cardholder.
3. Aids payment inwards domestic together with unusual currency
Credit carte aids its cardholder to brand payments inwards whatsoever currency of choice. In other words, it gives its holder a unique facility to brand payments either inwards domestic (native) currency or if necessary, also inwards unusual (non-native) currency, that besides equally together with when required.
Credit carte reduces the cumbersome procedure of currency conversion. That is, it removes the fiscal complexities ofttimes encountered inwards converting a domestic currency into a unusual currency. It is because of this feature, a credit cardholder tin dismiss mayhap brand payments to merchants introduce inwards whatsoever corner of the world.
4. Record keeping of all transactions
Credit carte issuing entities similar banks or NBFCs keeps a consummate tape of all transactions made yesteryear their credit cardholders. Such a tape helps these entities to enhance appropriate billing amounts payable yesteryear their cardholders, either on a monthly or around periodic basis.
5. Regular charges
Regular charges are basic routine charges charged yesteryear the credit carte issuing entity on the usage of credit carte yesteryear its cardholder. These charges are nominal inwards nature.
The regular charges are primarily classified into 2 types, viz.,
- Annual charges, and
- Additional charges.
Annual charges are collected on per annum or yearly basis.
Additional charges are collected for other supplementary services provided yesteryear the credit carte issuing entity. Such services include, add-on-card (an additional credit card), number of a novel credit card, etc.
6. Grace period
The grace catamenia is referred to those minimum numbers of additional days inside which a credit cardholder has to pay his credit carte mouth without whatsoever incurring involvement or fiscal charges.
7. Higher fees on cash withdrawals
Credit-card issuer makes charges on cash withdrawals made through credit carte at the blogspot.com//search?q=what-is-credit-card-meaning-definition">ATM outlets together with other desks. Generally, cash withdrawal fees are quite higher than fees charged yesteryear the banking concern or NBFC for the other regular credit transactions. On cash withdrawn done through a credit card, involvement is charged from the same day. That is, involvement is charged since the twenty-four hours on which cash is withdrawn. Usually, no grace catamenia is provided for cash transactions.
8. Additional charges for delay inwards payment
The credit carte payment is supposed to live made inside a due appointment equally mentioned on the mouth of a credit card. If payment is non paid on time, together with thence a credit-card issuer charges around additional costs, which are resulted due to delay inwards payment. These charges are charged to compensate (recover) the involvement cost, direction toll together with whatsoever other related costs bared yesteryear the credit carte issuing entity.
9. Service tax
Service blogspot.com//search?q=what-is-credit-card-meaning-definition">tax is included inwards the full amount charged to the credit cardholder. This mandatory service taxation imposed yesteryear the authorities also increases the lastly terminate toll bared yesteryear a credit cardholder. Many credit carte providers (issuing entities) accept policies of reversing the service taxation charged on the buy of gas, fuel together with other similar goods.
10. Bonus points
The contest amidst the credit carte providers is unbending (adamant). Offering diverse incentives is ordinarily a trendy (fashionable) agency to improve the sale of the products inwards the ordinary course of report of blogspot.com//search?q=what-is-credit-card-meaning-definition">business. Following this trend, credit carte providers also plough over bonus points on the fiscal value of the transactions compiled yesteryear their customers.
11. Gifts together with other offers
At a subsequently phase (i.e. after crossing pre-determined number of bonus points) accumulated bonus points are redeemed either yesteryear converting them into gifts, cash dorsum offers, or whatsoever other similar compelling offers. To collect many bonus points, the credit cardholder has to comport out a considerable number of transactions through his credit card.
Conclusion on Credit Card
Based on give-and-take made above, nosotros tin dismiss conclude that,
Credit carte is the lawsuit of comprehensive banking functions.
Credit carte is really convenient fiscal short-term lending facility available to a credit cardholder. However, the security together with security of the credit carte are also of prime number importance. These depend on the physical protection of the credit carte equally good equally inwards the isolation (confidentiality) of the credit carte number, carte value number (CVV), personal identification number (PIN) together with other sensitive credentials of the credit cardholder.
