What is Credit Card? Limit, Penalty, Due Date, Benefit and Disadvantage

How can an intelligent use of a credit card be made so that you can make the best use of a credit card and get the most benefit from it and get more rewards? In this article you will know whether to use a credit card or not, if you want to use it then how much should be done so that we do not face any kind of penalty. You will also know how to increase credit card rewards and to know which credit card you should use.


What is Credit Card?

Do you know what a credit card is, and what makes it different from a debit card? Debit card, also known as ATM card by most people. Through this card you use the money which is in your bank account (saving / current) which you have deposited in your account.


You can spend this money online or get out of the ATM machine. Suppose you have ₹ 15000 in your bank account, and you spend it, then you can spend as much as ₹ 15,000, or get this money out of the ATM machine.


But this is not the case with the credit card, from this card you can use the money that the bank has set your limit while making the credit card.


As your credit card limit is 50000 thousand rupees, even if you have 15000 rupees in your bank account, then you can swap up to 50000 rupees with your credit card, you can do shopping and your 15000 rupees will remain in the bank.


A credit card is a type of loan that a bank gives you in the form of a card. This amount has to be paid by the bank for a specified time without any interest but if you exceed the time limit, then the bank takes a lot of interest from you.


Read also: How to Check the Credit / CIBIL Score in Paytm App

What is the limit of a credit card?

Just like in a debit card, you can spend only as much money as you have in your bank account, just as it was in the credit card, you can spend as much money as your credit card limit, for example if your credit card limit is 50000 If you are, then you can spend a whole lesser amount than that.


Limit of a credit card. The bank sets your credit card limit based on your savings account, income tax return (ITR), your track record etc. Usually the credit card has an initial limit of 50000 to 65000.


Credit Card due Date Period

Credit card has been made, limit has also been fixed, used and now it is time to return the money spent. In how many days you can return the money spent by credit card so that there is no penalty of late.


The bank gives you 45 days to return the money spent on most credit cards and 50 days in some banks. You have to return all the money spent in these 45-50 days. It depends on you, you complete it by depositing it weekly and then you deposit the entire amount once.


Credit Card due Date Penalty

After using the credit card you have a time period of 45-50 days within which you have to return the money spent. If you exceed the due date or for some reason you are unable to pay, the bank may charge you a big fine.


It depends on the bank how much penalty it will apply. Some banks may charge 2.5%, some banks 3%, some banks 5%, and some banks 10% or more.


Advantage / Benefits of Credit Card

Money is used in emergency

Interest Free within 45-50 days

Helps improve ‘CIBIL score’ so that you can get loan easily in future.

Rewards on using credit cards


Disadvantage of Credit Card

A big penalty for not paying on time

CIBIL scores will decrease if you do not pay on time

No bank will give you loan


Things to Keep in Mind When Making a Credit Card

How much interest does the bank charge after the interest free period of the bank from which you are taking the credit card, then you select the one who charges the lowest interest?


The annual maintenance charge should be minimum or it should not be.


There should be no issuance fee.


Select the card according to your usage in which you will get more reward.

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