Credit Card

Credit cards in India is gaining ground. A number of banks in India are encouraging people to use credit card. The concept of credit card was used in 1950 with the launch of charge cards in USA by Diners Club and American Express. Credit card however became more popular with use of magnetic strip in 1970.

Credit card in India became popular with the introduction of foreign banks in the country.

Credit cards are financial instruments, which can be used more than once to borrow money or buy products and services on credit. Basically banks, retail stores and other businesses issue these.

Major Banks issuing Credit Card in India

State Bank of India credit card (SBI credit card)
Bank of Baroda credit card or BoB credit card
ICICI credit card
HDFC credit card
IDBI credit card
ABN AMRO credit card
Standard Chartered credit card
HSBC credit card
Citibank Credit Card

Precautions taken after receiving credit card
To Avoid:

Bending the Card.
Exposure to electronic devices and gadgets.
Direct exposure to sunlight.
Be cautious about disclosing your account number over the phone unless you know you're dealing with a reputable company.
Never put your account number on the outside of an envelope or on a postcard.
Draw a line through blank spaces on charge or debit slips above the total so the amount cannot be changed.
Don't sign a blank charge or debit slip.
Tear up carbons and save your receipts to check against your monthly statements.
Cut up old cards - cutting through the account number - before disposing of them.
Open monthly statements promptly and compare them with your receipts. Report mistakes or discrepancies as soon as possible to the special address listed on your statement for inquiries. Under the FCBA (credit cards) and the EFTA (ATM or debit cards), the card issuer must investigate errors reported to them within 60 days of the date your statement was mailed to you.
Keep a record - in a safe place separate from your cards - of your account numbers, expiration dates, and the telephone numbers of each card issuer so you can report a loss quickly.
Carry only those cards that you anticipate you'll need.

To Do:

Please sign on the signature panel on the reverse of the Card immediately with a non-erasable ball-point pen (preferably in black ink). This will ensure that the benefits of membership are yours and yours alone.
Keep the Card in a prominent place in your wallet. You will notice if it is missing.

Reasons credit card being rejected at retail outlet:

One may have exceeded the borrowing limit or defaulted (constantly) on minimum payment due.
The Card is hotlisted.
The card has crossed its expiration date.
Non-receipt of dues of one-card blocks future transactions on any other card(s) held of the same card-issuing bank.
The magnetic stripe on the reverse of the card is damaged i.e. has been scratched or exposed to continuous heat/direct sunlight or magnetic field-like card kept near a TV set / other electronic appliances.
Systems or technology failures have in rare instances also led to non acceptance of cards when swiped through an Electronic Terminal.

Global player in credit card market

MasterCard

MasterCard is a product of MasterCard International and along with VISA are distributed by financial institutions around the world. Cardholders borrow money against a line of credit and pay it back with interest if the balance is carried over from month to month. Its products are issued by 23,000 financial institutions in 220 countries and territories. In 1998, it had almost 700 million cards in circulation, whose users spent $650 billion in more than 16.2 million locations.

VISA Card

VISA cards is a product of VISA USA and along with MasterCard is distributed by financial institutions around the world. A VISA cardholder borrows money against a credit line and repays the money with interest if the balance is carried over from month to month in a revolving line of credit. Nearly 600 million cards carry one of the VISA brands and more than 14 million locations accept VISA cards.

American Express

The world's favorite card is American Express Credit Card. More than 57 million cards are in circulation and growing and it is still growing further. Around US $ 123 billion was spent last year through American Express Cards and it is poised to be the world's No. 1 card in the near future. In a regressive US economy last year, the total amount spent on American Express cards rose by 4 percent. American Express cards are very popular in the U.S., Canada, Europe and Asia and are used widely in the retail and everyday expenses segment.

Diners Club International

Diners Club is the world's No. 1 Charge Card. Diners Club cardholders reside all over the world and the Diners Card is a alltime favourite for corporates. There are more than 8 million Diners Club cardholders. They are affluent and are frequent travelers in premier businesses and institutions, including Fortune 500 companies and leading global corporations.

JCB Cards

The JCB Card has a merchant network of 10.93 million in approximately 189 countries. It is supported by over 320 financial institutions worldwide and serves more than 48 million cardholders in eighteen countries world wide. The JCB philosophy of "identify the customer's needs and please the customer with Service from the Heart" is paying rich dividends as their customers spend US$43 billion annually on their JCB cards.

Grace / Interest Free Period

The number of days you have on a card before a card issuer starts charging you interest is called grace period. Usually this period is the number of days between the statement date and the due date of payment. Grace periods on credit cards are usually 2-3 weeks. However, there is likely to be no grace for balances carried forward from previous month and fresh purchases thereafter if any.

The following are some of the varieties of credit cards in India

ANZ - Gold
ANZ - Silver
Bank Of India - Indiacard
Bol - Taj Premium
Bol - Gold
BoB - Exclusive
BoB - Premium
Canara Bank - Cancard
Citibank - Gold
Citibank - Silver
Citibank WWF Card
Citibank Visa Card for Women
Citibank Cry Card
Citibank Silver International Credit Card
Citibank Women's International Credit Card
Citibank Gold International Credit Card
Citibank Electronic Credit Card
Citibank Maruti International Credit Card
Citibank Times Card
Citibank Indian Oil International Credit Card
Citibank Citi Diners Club Card
HSBC - Gold
HSBC - Classic
ICICI Sterling Silver Credit Card
ICICI Solid Gold Credit Card
ICICI True Blue Credit Card
SBI Card
Stanchart - Gold
Stanchart - Executive
Stanchart - Classic
Thomas Cook Standard Chartered Global Credit Card

Standard segregation of credit cards

Standard Card - It is the most basic card (sans all frills) offered by issuers.
Classic Card - Brand name for the standard card issued by VISA.
Gold Card/Executive Card - A credit card that offers a higher line of credit than a standard card. Income eligibility is also higher. In addition, issuers provide extra perks or incentives to cardholders.
Platinum Card - A credit card with a higher limit and additional perks than a gold card.
Titanium Card - A card with an even higher limit than a platinum card.

The following are some of the plus features of credit card in India

Hotel discounts
Travel fare discounts
Free global calling card
Lost baggage insurance
Accident insurance
Insurance on goods purchased
Waiver of payment in case of accidental death
Household insurance

Some facts of credit cards

The first card was issued in India by Visa in 1981.
The country's first Gold Card was also issued from Visa in 1986.
The first international credit card was issued to a restricted number of customers by Andhra Bank in 1987 through the Visa program, after getting special permission from the Reserve Bank of India.
The credit cards are shape and size, as specified by the ISO 7810 standard. It is generally of plastic quality. It is also sometimes known as Plastic Money.

FAQs

What does Grace / Interest Free Period Mean?
The number of days given to you on your card before the card issuer starts charging you interest is called grace period. Generally the grace period is the number of days between the statement date and the due date of payment. Grace periods on credit cards are usually 2-3 weeks. However, there is likely to be no grace for balances carried forward from previous month and fresh purchases thereafter if any.

What is implied in Cash Advance?
Cash advances on Credit Cards are convenient and the easiest facility to utilise. Manority of the banks in India charge a transaction fee as well as service fee / interest charge on cash advances. This service fee accrues from the date of the advance (as soon as you receive the cash) to the date of full payment. The charges varies from banks to banks. Cash advance facility is a part of the overall credit limit assigned to a cardholder. The limit is of cash acvance is always lesser than the borrowing limit or the credit limit.

How to make payments from Dubai to the already existing Citibank cards in India. How to avail of the statements to know the current bank balance of each card. Is online facility available?
According to RBI " Resident Indians may be nominated as additional/add-on card holders by non-residents. However, the non-residents from their foreign currency funds should meet claims arising out of use of such cards by residents only.In cases where the cards have been arranged by NRIs these liabilities may be met out of NRE/FCNR accounts in India also. Under no circumstances will any remittance be allowed by residents from India to settle their claims against use of such additional/add-on cards". NRIs get rupee credit cards which are valid for use in India, Nepal and Bhutan.

Can I use my Global credit card on the net to pay some US company for web hosting charges? or I have to obtain permission from RBI. If any permissions are needed, How to get them?
The RBI's exchange control manual mentions that 'International Credit Cards' can be used for "Registration of Internet domain name, hosting charges for website/home pages overseas and access fees for Internet related services through website". Before using your Global Credit Card on the net for web hosting charges, you further clarify the aforesaid issue or seek permission from your card issuer. Even get in touch with the card issuing bank or organisation directly for such clarifications.

How will I know if my Credit Card application has got approved?
It is suggested to give your mobile number and e-mail id at the time of application for the Credit Card. This will help the issuer to intimate you either through SMS or through e-mail with the approved status of your application. You will also receive a letter by post informing you of the Card approval. You should be receiving your Card around the same time as the approval letter.

How will I know if my Credit Card application has got declined?
You will receive a letter from the Bank even if your application for Card is not approved. If in case there is a further information of missing documents, you will be sent a letter asking for the same. Then you need to fulfil with the documents to the specified address.

What to do if Credit Card is Lost or Stolen?
Report the loss or theft of your credit cards to the card issuers to the earliest through their 24-hour helpline service. Follow up your phone calls with a letter. Include your account number, when you noticed your card was missing, and the date you first reported the loss.

After doing these, check your homeowner's insurance policy to see if it covers your liability for card thefts. If yes its fine otherwise change your policy to include this protection.

Before the intimation, different banks have their own limit of loss bearing by the card holder. After the intimation, it is the bank who bears the loss if any amount is spent.