Best credit card features and benefits 2022

credit card features and benefits

credit card features and benefits: What is a credit card?

Credit card features and benefits: Simply put, a credit card is just a small piece of plastic that easily fits in your wallet. Well, it’s not ‘just a piece of plastic’; it’s a very powerful piece of plastic that can be regarded as a compressed form of cash. We can define credit cards as a credit system that allows the consumer to borrow money on the fly from a bank or a financial institution and use it to make payments to merchants.

In order to obtain a credit card, the consumer needs to fill in an application form that is actually like an agreement between the credit card supplier and the credit card consumer. The credit card supplier approves the application form and provides the consumer with a small piece of plastic (i.e. the credit card). This plastic (or credit card) contains electronically encoded security information in the form of a magnetic strip, (which is generally located at the back of the credit card).

This information is used for authorizing payments whenever the consumer uses a credit card. The consumer can use the credit card for shopping at merchant outlets, on the internet, etc. Of course, this is subject to the merchant’s capability to accept credit card payments.

Accepting credit cards is, however, not enough. The merchant should be able to accept payments made through the credit card provided by that credit card organization (of which you hold the credit card) i.e. VISA, MasterCard, etc. You can also use credit cards to withdraw cash from ATMs (automatic cash machines) – also known as cash machines or Day/Night machines.

There are eight main credit card organizations, and most of them operate in many countries around the world. These are American Express, Citi, Diners Club, Discover, JCB, MasterCard, and VISA. Mastercard and Visa are probably the most popular ones. Then there are credit card suppliers or issuers who have tie-ups with these organizations and issue credit cards on their behalf e.g. you have various banks that issue VISA cards (like HSBC VISA card)

To make a payment using a credit card, the credit card has to be either swiped into a special credit card processing machine (when shopping in person at shops) or the details of the credit card have to be entered on the merchant’s website (when shopping online). The credit card supplier sends across the bill for these transactions to the consumer who is then required to pay either the full amount or a partial (minimum) amount.

If you pay in full, the credit card supplier doesn’t charge any interest on the amount you owe, otherwise the pre-agreed interest rate is charged. If you don’t pay even the minimum, you might land up with a late fee too. Moreover, the credit card supplier generally puts a limit on the maximum amount you can spend per month using your credit card.

Features of Credit Cards in India: A Comprehensive Guide

In this article, we present an in-depth exploration of the various features of credit cards available in India. As a leading provider of valuable financial insights, we aim to equip you with the essential knowledge required to make informed decisions when choosing the best credit card for your needs. We understand that navigating the world of credit cards can be overwhelming, but fear not, as we are here to simplify the process for you.

1. Decoding Credit Cards

Before we dive into the plethora of features that credit cards in India offer, let’s understand what credit cards actually are. A credit card is a powerful financial tool that allows you to borrow money from a financial institution, typically a bank, up to a pre-approved credit limit. It enables you to make purchases or withdraw cash on credit, which you can repay in full or in part within a specified period.

2. Credit Card Features Explained

2.1. Credit Limit and Eligibility

Every credit card comes with a predefined credit limit, which indicates the maximum amount of credit you can access. The credit limit is determined based on various factors, including your credit score, income, employment status, and existing financial liabilities. Understanding the eligibility criteria and credit limit beforehand can save you time and effort during the application process.

2.2. Reward Programs

Credit card companies often entice customers with attractive reward programs. These rewards can range from cashback on purchases, discounts at partner outlets, airline miles, and even loyalty points that can be redeemed for a variety of products and services. It is essential to compare different cards to find the one that aligns with your spending habits and offers the most lucrative rewards.

2.3. Interest Rates

The interest rate, also known as the Annual Percentage Rate (APR), is a crucial factor to consider when selecting a credit card. This rate determines the interest you will be charged on outstanding balances if you don’t pay the entire amount before the due date. Lower interest rates are preferable, as they can significantly reduce your financial burden.

2.4. Introductory Offers

Many credit cards in India come with attractive introductory offers such as zero annual fees for the first year, waived joining fees, or reduced interest rates. While these offers may seem enticing, it is essential to read the fine print and understand the terms and conditions associated with them.

2.5. Contactless Payments

With advancements in technology, most credit cards now come with contactless payment options. This feature allows you to make secure and swift transactions by simply tapping your card on a point-of-sale (POS) terminal. Contactless payments are not only convenient but also reduce the risk of card fraud.

2.6. EMI Conversion

Some credit cards provide the option to convert significant purchases into Equated Monthly Installments (EMIs). This facility can be beneficial when purchasing high-value items, as it allows you to spread the cost over several months, making it more manageable within your budget.

2.7. Fuel Surcharge Waiver

For frequent travelers and commuters, credit cards with fuel surcharge waivers can be a significant advantage. These cards provide rebates on fuel expenses, saving you money every time you fill up your vehicle at the gas station.

2.8. Travel Benefits

If you are a globetrotter, certain credit cards offer exclusive travel benefits such as complimentary airport lounge access, travel insurance coverage, and attractive discounts on flight and hotel bookings. These perks can elevate your travel experience and provide added peace of mind.

2.9. Security Features

Credit card companies invest heavily in ensuring the security of their customers’ transactions. Advanced security measures, such as One-Time Passwords (OTPs), fraud detection systems, and secure encryption, safeguard your card against unauthorized usage.

3. How to Choose the Right Credit Card

Selecting the perfect credit card involves careful consideration of your financial habits and needs. Here are some tips to guide you in making the right choice:

3.1. Assess Your Spending Patterns

Analyze your spending patterns and identify the categories in which you spend the most. If you are a frequent shopper, a card with cashback rewards might be suitable. For travelers, a card with travel benefits and no foreign transaction fees could be more advantageous.

3.2. Consider Fees and Charges

Credit cards often come with annual fees, joining fees, late payment charges, and more. Assess these fees to understand their impact on your overall financial planning.

3.3. Research Reward Programs

Thoroughly research the reward programs offered by different credit cards. Evaluate how well these rewards align with your preferences and lifestyle.

3.4. Read Customer Reviews

Customer reviews can provide valuable insights into the overall experience of using a specific credit card. Look for feedback on customer service, reward redemption process, and ease of card usage.

3.5. Compare Interest Rates

Interest rates can significantly affect your credit card experience, especially if you plan to carry a balance. Compare the APRs of various cards to find the most favorable one.

4. Conclusion

In conclusion, credit cards in India offer a wide array of features that cater to diverse financial needs and preferences. Understanding these features and how they align with your requirements is essential to make the most of your credit card experience. Remember to choose a card that complements your lifestyle and spending habits while keeping an eye on fees and interest rates.