It is crucial to know the meaning of credit cards if you want to simplify your finances and get rewarded for making purchases. As one of the most useful financial tools, credit cards have proved their worth to every cardholder who uses them responsibly.
They facilitate paying your bills on time or opting for EMI for high-value purchases. Based on your specific requirements, you can opt for a card that helps you to achieve your financial goals comprehensively. Here is a complete guide to help you better understand this smart payment solution.
What is a Credit Card?
It is an excellent financial tool made out of plastic or metal. With this, you have funds as per a pre-approved limit at your fingertips, allowing you to pay on time and efficiently. Issuers determine your credit limit amount based on various measures, such as your creditworthiness and repayment capacity.
As such, you can take the meaning of credit cards as a tool that allows you to borrow the same amount from the issuer every month. Based on what you spend it on, you can pay it back within a billing cycle. You can even avoid interest by paying your bill before the due date.
Types of Credit Cards
Here are some common credit card types you can apply for based on your requirements.
- Regular/ unsecured credit cards
- Secured credit cards
- Premium credit cards
- Co-branded credit cards
- Business credit cards
- Fuel credit cards
- Reward credit cards
- Cashback credit cards
- Lifestyle credit cards
- Travel credit cards
- Student credit cards
Essential Features of a Credit Card
Most credit card users do not delve into how to get the best use out of them. To do this, you need to know the features available on your cards. That said, here are some features you can enjoy with most credit cards.
- Spend Analysis
Every month, you get a statement with a record of your transactions that helps you analyse your monthly expenses. This will give you a better knowledge of how spontaneous or impulsive you are with your purchases.
- Credit Limit
All credit cards come with a fixed limit beyond which you cannot spend. This allows you access to money without overspending and falling into debt. Regardless, you should not use more than 30% of your total credit limit for good financial health.
- Payments
Credit cards are the best option when you want to make a payment but are short on funds. Using it, you can also convert your purchases into EMI. It also allows you to get cash during emergencies, but that may come at a high cost.
- Modify Billing Cycle
You have the opportunity to modify your billing cycle based on your money flow. Every credit card issuer has given this opportunity to all credit card users to modify their credit card billing date at their convenience.
Apart from these features, you get added security along with the convenience of easy online and offline payments. Once you start using a credit card, you will come across its many incredible benefits to help you manage your cash flow and urgent expenses.
How Does it Work?
You use your credit card mostly in two places: at a store or online. Here, are the steps to using your credit card in both places.
At a Store
- Select your desired product
- Proceed to the cash counter
- Request for credit card payment
- Swipe your credit card
- Enter your PIN
- Complete the transaction
Online
- Selected your product by adding it to the cart
- Go to the payment gateway
- Select your delivery address
- Choose a credit card as your payment option
- Select your preferred card
- Enter the 16-digit card number, expiry date and CVV
- Enter the OTP to complete the payment
How to Apply For a Credit Card?
Thanks to fintech advancements, you can apply for an instant credit card from the comfort of your home. Once you have made your choice, you can follow these steps to apply online:
- Step 1: Check the eligibility criteria and all the terms
- Step 2: Go to the application page
- Step 3: Enter all the required details
- Step 4: Submit your documentation
- Step 5: Get approved by the Issuer
- Step 6: Get your credit card kit
- Step 7: Activate your credit card and start transactions
Note that having a good credit score is important to apply for a credit card. But if you want to build your credit score from scratch, getting a secured credit card is a smart option. Once you have good credit eligibility, you can choose from any of the other credit card options.
With the One Credit Card, you can get a secured or unsecured card with an easy application process. Both versions give you benefits like 5X reward points on the top two spending categories. This metal credit card comes with a very powerful app to help you manage your card effortlessly. You can use it to track purchases and set spending limits. To start using this lifetime-free credit card, apply online now!