| Summary: Credit card is a type of payment named | | | | The credit card interest rates have different types of |
| after the small disposable card issued to users of the | | | | interest rates starting from 7 to 35% depending largely |
| system. In the case of credit cards, the issuer lends | | | | upon the bank's risk evaluation methods and the |
| finance to the user which is paid later to the lender. A | | | | borrower's credit background. Europe has much higher |
| credit card allows the consumers to 'revolve' their | | | | interest rates, about 50% over that of most developing |
| balance, at the cost of interest charged. Most credit | | | | nations, which average about 200%. In Brazil |
| cards are issued by the banks and are of the same | | | | bank-issued Visa or Master card to a new account |
| shape and size. | | | | holder can have annual interest as high as 240% even |
| Credit cards are given once an account has been | | | | though inflation seems under control at around 6% per |
| approved by the credit provider, after which | | | | annum. |
| cardholders can use it to make purchases at shops | | | | RBI has made life convenient for credit card users. It |
| accepting that card. When a purchase is made, the | | | | has come up with a host of criteria for financial |
| credit card user agrees to pay back the issuer. The | | | | institutions and other companies that manufacture |
| person having credit card shows his will to pay by | | | | cards. The new instruction says that banks should not |
| signing a receipt with a record of the card details and | | | | charge excessive credit card interest rates and must |
| indicating the sum to be paid or by entering a personal | | | | define a rate of interest. RBI also wants banks to have |
| identification number (PIN). Also, many merchants now | | | | a system to provide credit card customers their |
| accept verbal authorizations via telephone and | | | | monthly statement. |
| electronic authorization using the internet, known as a | | | | Financial institutions are warned against sending |
| 'Card/Card holder Not Present' (CNP) transaction. | | | | statements after a gap of a few years and |
| Electronic checking mechanism permits the vendors to | | | | demanding payments. RBI has slammed the practice |
| check if the card is valid and the credit card customer | | | | of issuing unsolicited credit cards and has regulated |
| has enough credit to cover the purchase in a few | | | | stringent penalties on banks indulging in any |
| seconds, permitting the check to happen at time of | | | | mal-practices. |
| purchase. Data from the card is obtained from a | | | | Let us take a look at the best credit cards in India |
| magnetic stripe which is called PIN, and more | | | | which differ from bank to bank and some of them are |
| technically is an EMV card. Other types of verification | | | | visa card,master card, domestic, international, gold |
| systems are used by e-Commerce merchants to | | | | credit card, classic credit card,platinum credit card, |
| determine if the user's account is valid and able to | | | | sterling silver card etc. Many people feel that ICICI has |
| accept the charge. | | | | the best credit cards with range of Signature Credit |
| It involves the cardholders providing additional | | | | Card, Ascent American, Express card and ICICI bank |
| information, such as the security code printed at the | | | | Titanium Credit Card. |
| back of the card, or the address of the cardholders. | | | | Thus it is clear that credit cards are the latest fashion |
| Credit card issuers usually exempt interest charges if | | | | tools in the word of finance and economics. Their |
| the balance is paid in full every month, but normally it | | | | arrival has infused a new spirit in the otherwise boring |
| charges full interest on the entire outstanding balance | | | | areas of retailing and shopping. Their arrival has |
| since the date of each purchase if the entire sum is | | | | facilitated the business to a very large extent. |
| not paid. | | | | |