What Are Features Of Credit Card?

What are Features of Credit Card?

The xi of import features of credit card are depicted inward the icon below.

The head characteristics or features of credit carte are listed every bit follows:

1. Alternative to cash.
2. Credit limit.
3. Aids payment inward domestic in addition to unusual currency.
4. Record keeping of all transactions.
5. Regular charges.
6. Grace menstruation or grace days.
7. Higher fees on cash withdrawals.
8. Additional charges for delay inward payment.
9. Service tax.
10. Bonus points.
11. Gifts in addition to other offers.

Now let's hash out each characteristic of credit carte ane past times one.

1. Alternative to cash

Credit carte is a meliorate option to cash. It removes the worry of carrying diverse currency denominations to pay at the merchandise counters. It is quite tardily in addition to agency fast to utilization a credit carte rather than waiting for completion of cash transactions.

As an alternative, credit carte helps a cardholder to move anywhere inward the dry reason without a take to acquit an ample amount of cash. It also reduces the possible adventure of coin theft in addition to gives its user a consummate peace of mind.

2. Credit limit

The credit cardholder enjoys the facility of a credit bound assault his card. This bound of credit is determined past times the credit carte issuing entity (bank or NBFC) exclusively after analyzing the credit worthiness of the cardholder.

The credit bound is of 2 types, viz.,

1. Normal credit limit, and
2. Revolving credit limit.

Normal credit limit is commons credit given past times 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 inward domestic in addition to unusual currency

Credit carte aids its cardholder to brand payments inward whatsoever currency of choice. In other words, it gives its holder a unique facility to brand payments either inward domestic (native) currency or if necessary, also inward unusual (non-native) currency, that every bit good every bit in addition to when required.

Credit carte reduces the cumbersome procedure of currency conversion. That is, it removes the fiscal complexities oft encountered inward converting a domestic currency into a unusual currency. It is because of this feature, a credit cardholder tin hand the sack perhaps brand payments to merchants introduce inward 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 past times their credit cardholders. Such a tape helps these entities to heighten appropriate billing amounts payable past times their cardholders, either on a monthly or unopen to periodic basis.

5. Regular charges

Regular charges are basic routine charges charged past times the credit carte issuing entity on the usage of credit carte past times its cardholder. These charges are nominal inward nature.

The regular charges are primarily classified into 2 types, viz.,

1. Annual charges, and
2. Additional charges.

Annual charges are collected on per annum or yearly basis.

Additional charges are collected for other supplementary services provided past times 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 menstruation is referred to those minimum numbers of additional days inside which a credit cardholder has to pay his credit carte nib 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 ATM outlets in addition to other desks. Generally, cash withdrawal fees are quite higher than fees charged past times 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 24-hour interval on which cash is withdrawn. Usually, no grace menstruation is provided for cash transactions.

8. Additional charges for delay inward payment

The credit carte payment is supposed to hold out made inside a due appointment every bit mentioned on the nib of a credit card. If payment is non paid on time, in addition to hence a credit-card issuer charges unopen to additional costs, which are resulted due to delay inward payment. These charges are charged to compensate (recover) the involvement cost, management terms in addition to whatsoever other related costs bared past times the credit carte issuing entity.

9. Service tax

Service tax is included inward the full amount charged to the credit cardholder. This mandatory service taxation imposed past times the authorities also increases the concluding halt terms bared past times a credit cardholder. Many credit carte providers (issuing entities) convey policies of reversing the service taxation charged on the buy of gas, fuel in addition to other similar goods.

10. Bonus points

The contest amidst the credit carte providers is unbending (adamant). Offering diverse incentives is commonly a trendy (fashionable) agency to improve the sale of the products inward the ordinary course of didactics of business. Following this trend, credit carte providers also hand bonus points on the fiscal value of the transactions compiled past times their customers.

11. Gifts in addition to other offers

At a subsequently phase (i.e. after crossing pre-determined number of bonus points) accumulated bonus points are redeemed either past times converting them into gifts, cash dorsum offers, or whatsoever other similar compelling offers. To collect many bonus points, the credit cardholder has to acquit out a considerable number of transactions through his credit card.

Conclusion on Credit Card

Based on give-and-take made above, nosotros tin hand the sack 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 in addition to security of the credit carte are also of prime number importance. These depend on the physical protection of the credit carte every bit good every bit inward the isolation (confidentiality) of the credit carte number, carte value number (CVV), personal identification number (PIN) in addition to other sensitive credentials of the credit cardholder.