Annual Percentage Rates, balance transfer, prime rate- sometimes, many things are associated with credit cards. But little research can help you be more comfortable with the privileges and restrictions of your best credit card in India.
Some people overlook credit card terms and conditions because they need more time to understand them. Others need to put more effort into understanding them and decoding the financial document. A credit card app can help you with it.
Credit Card Terms and Conditions
Credit card terms and conditions are available when you send your application for the best credit card in India offline, through the official portal of banks, non-banking finance companies, or with the help of a credit card app. Some credit card terms and conditions you should know before applying for one are as follows:
Annual Percentage Rate or APR
A credit card’s APR or Annual Percentage Rate is the interest rate you pay on your owed debt in one year expressed as a percentage. Credit cards comprise over one APR because credit card issuing companies charge multiple rates for balance transfers and specific transaction types. Numerous credit cards have different Annual Percentage Rates- balance transfer, purchase, introductory, variable, cash advance, fixed, and penalty APR. When you send your application for a credit card, knowing the APRs is essential because they can massively impact the amount you owe if you have a monthly balance.
Balance transfers are when you take debt from the best credit card in India and switch to a new credit card with a 0% introductory Annual Percentage Rate for a fixed tenure, usually 6 to 21 months. Simply put, a balance transfer facility transfers money from one credit card to another. A balance transfer gives you more time to repay debt and save you on interest fees. The balance transfer facility can aid you in taking advantage of a different credit card’s competitive interest rates. Remember that the balance transfer between credit cards from the same bank cannot be transferred. If you want to transfer your balance from your existing credit card to a new one, you can send your application for a new credit card through the credit card app.
A cash advance is the act of withdrawing money from your account with the help of your best credit card in India. Credit card issuing companies limit the amount of money you withdraw from your account using your credit card to a portion of your overall credit limit. They levy high-interest rates and withdrawal charges, making cash advances expensive.
Cardholder agreements are legal documents that establish an agreement between the credit card issuing company and cardholders. It pinpoints the obligation a cardholder and a credit card issuing company have towards each other. The Most Important Terms and Conditions include fees related to a credit card and are part of the cardholder agreement.
Your best credit card in India has introductory offers like additional discounts with a few chosen brands for the first year, no balance transfer fees for six months, etc. Credit card issuing companies offer such introductory offers to grab customers’ attention and lure them into applying for one. A few conditions for such introductory offers might be associated with spending restrictions or offer tenure. You read the MITC document to know the terms associated with introductory offers. You can also install a credit card app on your smartphone and carefully go through the rewards and offer section before applying for a credit card.
Credit Utilisation Ratio
The credit utilization ratio describes how much of the credit limit you have used and factors into your credit score. Simply put, CUR is the credit amount you used in contrast to the credit amount you have in your account. Keeping your CUR below 35% is advisable and positively impacts your credit score because it shows judicious credit usage. A credit card app is vital because it sends you notifications, and you can monitor your credit card.
Grace periods are the time between your billing cycle’s end and when your bill is due. Credit card issuing companies will not charge you for your balance during a grace period. A grace period ranges from one issuer to another but should be at least 21 days from the billing cycle’s end. It doesn’t apply to cash advances or balance transfers.
A prime rate, or prime lending rate, is the interest credit card issuing companies charge customers. The interest rate on your credit card might be over the prime rate. If the prime rate fluctuates, your variable Annual Percentage Rate will also vary. Therefore, if there is an increase in the prime rate, your variable APR will too rise and vice versa.
When you apply for a credit card, you quickly review the terms and conditions and concentrate more on the offer page to learn more about the benefits. However, terms and conditions are crucial. You can download the credit card app to learn more. You should dig deeper into the terms and conditions to know more about credit cards. It might be yawn-inducing, but the fine print is important. Refrain from allowing the credit card terms and conditions to demotivate you from applying for the best credit card in India.