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