One of the key variables that factor in the choice of a credit card is the interest rate that a credit card offers. Indians are gradually warming up to credit card use for most of their expenses, as they know it is a valuable and effective mode of payment.
It offers convenience namely, and a means to pay for expensive items in staggered payments, especially for salaried individuals.
The Reserve Bank of India has given a boost to banks to offer and encourage credit cards by low intrest.
Promoting credit card use, initially with the introduction of demonetization, usage of these cards has risen to a high degree over the past few years, with people in tier 2 and tier 3 metros opting for credit cards.
Average-income earners may select cards that have low credit card interest rates and zero charges or joining fees. It is important to know about interest rates charged on credit cards, and these vary from card to card, and between different cards issued by a single issuer.
Interest is charged on a credit card only if you fail to pay the outstanding amount. You may have withdrawn cash from an ATM with your card, and that will incur an interest rate too. However, no interest is charged if you pay your bill on time.
Credit Card and Interest
Most users claim that they choose credit cards suited to their requirements. Nowadays, banks and finance companies offer individuals credit cards which is used to meet expenses matched with individual requirements.
you get fuel credit cards that you can use if your fuel expenses are frequent, and you want to save by earning reward points and getting discounts at fuel outlets.
Besides choosing a card that meets the purposes for which you want to use it. You will want to know about the financial aspects linked to your card. While a credit card lets you purchase goods and services at any point in time, and gives you a line of credit from the first purchase you make. You will have to pay your credit card bill at the end of a credit-free period.
A billing statement is generated with a due date for payment. It is imperative that you pay the entire amount on your statement to avoid credit card interest rates.
In case you don’t pay your bill on time, interest charges will have to be paid on any outstanding amount. Even if you pay the “minimum amount due”, you will incur interest on any amount that is the balance.
Depending on the credit card and the issuer, this interest rate may vary from 3% – 4% per month. Certain credit cards offer low interest rates, compared to ones issued by banks, such as those from finance companies like Bajaj Finserv.
The Bajaj Finserv RBL Bank SuperCard is one of the most valuable credit cards today. It is offering loans of up to 90 days with meager interest rates at 1.16% per month. It is acting as a loan card, an EMI card, and a cash card. You get interest-free cash withdrawals for up to 50 days. Benefits include reward points and discounts while shopping.
It’s easy to find out how to apply Credit card. This card is done online, and you can also check charges, like interest rates.
Other Important Facts
Credit card categories exist for a range of users, from high-end spenders and affluent individuals to lower-income groups. Although reward points earned may be high on flagship cards, interest and other finance charges are also high.
An important fact that is often overlooked by people who may not pay their entire credit card dues on time is that interest will be charged on each fresh transaction.
If you owe the credit card company any outstanding amount, the interest-free period stands withdrawn till you clear your bill. Fresh spends will incur the same interest rate and get accumulated till you pay what you owe. Credit card charges must be researched, and you should know how much a particular credit card charges.