Credit Cards: What it is? and Easy Steps to Apply For it

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Credit card is a small rectangular piece of plastic or metal provided by a bank or financial services business that enables cardholders to borrow cash to pay for products and services at merchants who accept cards.

It requires cardholders to repay the borrowed funds, plus any applicable interest, as well as any additional agreed-upon charges, in full by the billing date or over time.

What Is a Credit Card?

A credit card is a card issued by a financial institution, often a bank, which allows the cardholder to borrow cash from that institution. Cardholders agree to repay the money with interest according to the rules of the institution. Credit cards are available in the following categories:

  • Standard cards merely provide its customers with a line of credit for purchases, debt transfers, and/or cash advances, and they frequently have no annual charge.
  • Premium cards include privileges such as concierge services, airline lounge access, special event entry, and more, but their yearly costs are often more.
  • Rewards cards provide customers with cash back, travel points, or other perks based on how they spend.
  • Balance transfer cards provide reduced introductory interest rates and fees for transferring balances from another credit-card.
  • Secured credit cards need an initial cash deposit that is retained as collateral by the issuer.
Types of Credit Cards

There are several credit card options accessible to you, and it might be tough to determine which are the best credit cards for migrants. Let’s take a look at some of the most common credit card kinds so you know what you’re looking for when you apply for one.

1. Cash Back Credit Card

A cashback card functions similarly to a rewards card, except that instead of collecting points on purchases, you receive a certain amount of money. You may also earn bigger amounts of cashback on specific spending categories in Europe. If you don’t want to give in points for rewards, having a cashback card in Europe might be a terrific way to make money while you spend.

2. Interest-free or Low-interest Credit Cards

Some credit cards provide new clients with a promotional low-interest fee or no interest at all. This offer is often applicable for a specified amount of time, such as the first 3, 6, or 12 months after you receive your new card, after which the interest rate will revert to the card’s norm.

3. Travel Credit Card

A travel credit card, like a rewards card, allows you to earn points that may be redeemed for travel-related prizes such as hotel stays, flights, or vehicle rentals.

Some of them additionally provide additional perks such as airport lounge access, preferential foreign exchange rates, or free or reduced international ATM withdrawals.

4. Money Transfer Credit Card

Money transfer cards enable you to “borrow” dollars in order to transfer funds from your credit card to a bank account.

This is useful if your bank account is overdrawn and you want urgent dollars in your account.

5. Virtual Credit Card

A virtual or digital credit card acts similarly to any other sort of credit card, with the exception that it is not real.

You’ll still get a 16-digit credit card number, but instead of physically swiping your card, it’ll only exist theoretically.

A virtual card is most commonly associated with online-only digital banks, yet it may still be used for nearly any sort of payment.

Some companies, provide a virtual and real debit card, providing you additional alternatives for how you wish to spend your money.

6. Unsecured Credit Card

Unsecured credit cards are any sort of credit card that does not require a deposit to use.

Because a lender lacks security to show that you will pay off your amount, they will just presume that you will pay it each month.’

7. Prepaid Credit Card

A prepaid card may be used to make purchases in the same way as a credit card can, but instead of using it and then paying off the balance later, a balance is preloaded into the card and then used to make transactions.

It’s similar to a debit card in that money is immediately withdrawn from the card, but it also allows you the option of using a credit card if you’re making a transaction where debit isn’t accepted.

Others are as follows:

8. Charge Credit Card

9. Balance Transfer Credit Card

10. Secured Credit Card

11. Rewards Credit Card

How to Know Which Card to Choose?

When it comes to selecting the finest credit cards for migrants, you must consider your specific requirements.

A travel rewards card might be useful if you anticipate needing to go home frequently and want to accumulate flying points.

A cash back card, on the other hand, can help you earn money on your purchases, allowing you to save more.

A secured credit card might also assist you in establishing credit in a new nation if you do not have a credit history.

However, if you don’t need a credit card and merely want a safe means to spend your money while travelling overseas and the option to purchase online.

How do I get a credit card if I don’t have any credit?

Building credit history can be a catch-22 situation. Because you are an untested borrower if you have no credit, shops or banks are less inclined to give credit to you.

One of the simplest methods to get started is to open a secured credit card.

Because spenders are only borrowing from the money they put down as a deposit, the lender faces no risk, and it provides them with a picture of your spending and repayment patterns.

Another option is to become an authorised user on an existing credit account, such as a parent or spouse. The credit history of the cardholder will display on your account, adding longevity to your credit report.

However, be certain that the individual with whom you partner has decent credit practises.

If they make poor financial decisions, it will reflect poorly on you.

Do Credit Cards Have Fixed or Variable Annual Percentage Rates (APRs)?

Both forms of annual percentage rates are common on credit cards (APRs).

Read the cardholder agreement that came with your credit card to find out what type of APR you have.

Card issuers are required by law to publish the kind and amount of their APR.

If a fixed APR changes, they must notify customers.

Some credit cards offer fixed interest rates on purchases but variable interest rates on cash advances or late payments. To be sure, read the tiny print.

Pros of Using Credit Cards

Credit-cards have several advantages over debit cards, but they also have some disadvantages.

Here’s a deeper look at the benefits using credit-cards to make purchases.

Build Credit History

Credit card use appears on your credit report.

This covers both good and negative information, such as on-time payments and low credit usage percentages, as well as late payments or delinquencies.

The information in your credit report is then utilised to determine your credit scores.

Responsible spenders may improve their ratings by maintaining a history of expenditures and regular payments, as well as by keeping their card balances low in comparison to their card limitations.

As a card benefit, several credit-card providers provide free credit score monitoring and tracking, allowing you to keep track of your progress when developing credit.

Warranty and Purchase Protections

Some credit-cards may also give supplementary warranties or insurance on purchased products in addition to those provided by the shop or brand.

For example, if a credit card-purchased item becomes damaged after the manufacturer’s warranty has ended, it is worth checking with the credit card company to see whether coverage is available.

Alternatively, you may have purchase and price protection built in to assist you replace stolen or lost things, or reimburse price discrepancies when the item you purchased is sold for less elsewhere.

Fraud Protection

As long as the client notifies the loss or theft promptly, their maximum culpability for transactions made after the card has vanished is $50.

The Electronic Fund Transfer Act provides debit card holders with the same protection against loss or theft—but only if the loss or theft is reported within 48 hours of discovery.

The card user’s responsibility increases to $500 after 48 hours, and there is no limit after 60 days.

Credit-cards, in most circumstances, provide far stronger fraud protection than debit cards.

Cons of Using Credit Cards

The primary disadvantages of using credit-cards include debt, credit score consequences, and expense.

Spending Can Lead to Debt

When you use a credit card to make a transaction, you are spending the bank’s money, not your own.

This money must be repaid, together with interest. You must at the very least make the minimum amount due each month.

Having big balances on many cards might make it tough to keep up with monthly payments and put a strain on your budget.

Credit Score Impacts

Paying your bills on time and keeping credit card balances low will improve your FICO ratings.

However, if you fall into the practise of paying late, maxing out one or more of your cards, closing older accounts, or applying for new credit too frequently, you may harm your credit history.

Set up credit-card notifications to keep you informed of payment due dates and card balances, allowing you to pay on time and avoid exceeding your credit limit.

Interest and Fees

Because a credit-card is really a short-term loan, you’ll have to pay interest on everything you spend.

Your annual percentage rate is calculated using the interest rate and costs charged by the credit business (APR).

The greater the APR on the card, the more it will cost you to carry a balance month after month.

You should know if your card has an annual fee, a foreign transaction cost, a balance transfer fee, a cash advance fee, a late payment fee, or a returned-payment fee.

As a general rule, the greater the annual fee, the better the credit-card’s rewards programme and the more perks it provides.

Credit Card Numbers vs Account Numbers

Many consumers assume that the credit-card number is the same as their account number.

This is incorrect. However, the two are connected, and your account number is often printed on your credit-card statement.

If you need to replace your credit-card due to theft, loss, or damage, you will be given a new card number but your account number will stay the same.

Credit Card Apply – How to apply online?

On our website, you may apply for an IDFC FIRST Bank credit-card. Here is a step-by-step guidance to assist you apply for the credit-card you require:

  • Visit the IDFC FIRST Bank website.
  • Go to the credit-card page.
  • Look through the credit-cards available and choose the one that best fits your requirements and lifestyle.
  • Click ‘Apply Now’ to apply for your credit card online.
  • Enter your basic information, such as your name, age, residence, and employment information.
  • Once you’ve filled out these data, you may finish the online application by providing your consent online.
  • The bank will next process and verify your credit-card application internally.
  • Once accepted, you will receive your virtual credit-card on the IDFC FIRST Mobile Banking App.
  • In addition, your real credit-card plastic will be sent within 4-5 business days.
  • Alternatively, if you currently have an IDFC FIRST Bank Credit-Card offer, you can apply for the credit-card using the IDFC FIRST Bank mobile banking app.
How do I get a virtual free credit card?

How to Get Free Virtual Credit/Debit Cards in India

  • FreeCharge Go Master Card. Based in Mumbai, Maharashtra, FreeCharge is an e-commerce website.
  • Pockets Wallet by ICICI Banks.
  • Lime Wallets by Axis Bank. 
  • Slonkit Prepaid Wallets.
  • Entropay Virtual International Visa Card.

Credit Cards vs Debit Cards

With 16-digit card numbers, expiration dates, magnetic strips, and EMV chips, credit and debit cards look almost identical.

Both can make it easy and convenient to make purchases in stores or online, with one key difference.

Debit cards allow you to spend money by drawing on funds you have deposited at the bank. Credit-cards allow you to borrow money from the card issuer up to a specific limit in order to make purchases or withdraw cash.

How Can I Get GTB credit card?

What You Should Do

1. Domiciliary account form (USD) completed

2. There are two (two) referees.

3. 1 (one) recent passport photograph.

4. The most current Utility Bill.

5. A copy of your driver’s licence or passport.

6. N1,000 (or the equivalent in USD) issuance fee

FAQs

What is a credit card annual fee?

The annual fee on a credit-card is the price levied by the card issuer to provide you with the credit-card.

Some credit-cards do not have an annual fee, while others, particularly those that provide prizes or incentives such as cash back, might have annual fees ranging from $50 to $700.

How do you get credit card information?

Your account information may be found on your paper billing statement or when you log in to your online account.

This information can assist you in determining when to make payments, keeping track of your account balance and credit limit, and redeeming any incentives you may have earned.

Which card type is best?

Because of the brand’s widespread acceptance, they are the most widely used cards for online and offline electronic payment transactions. These cards employ the Visa payment gateway, which provides excellent security and 24×7 support.

How many credit cards should a person have?

It’s normally advised to have two to three credit-card accounts open at the same time, in addition to other sources of credit.

Keep in mind that your total available credit and debt-to-credit ratio might have an influence on your credit ratings. It may be difficult to keep track of monthly payments if you have more than three credit-cards.

Is it okay to cancel a credit card?

For good reason, credit experts advise against cancelling credit-cards even if you aren’t using them.

“Canceling a credit-card has the potential to lower your score rather than enhance it,” says Beverly Harzog, a credit-card specialist and consumer finance analyst for US News & World Report.

Does it cost money to use a credit card?

If you do not pay off your credit-card bill in full, the cost of using it is the interest you pay. This figure might range from a little sum — $20 or less — to a substantial sum.

How much is a credit card per month?

Based on the average American credit-card amount of $5,525 and the average minimum payment percentage of 2%, the typical monthly credit-card bill is a minimum payment of $110.50.

What is a credit card example?

The Chase Sapphire Preferred credit-card is one example of a credit-card. It provides cardholders with incentives in the form of points that may be exchanged for items such as airline miles and other benefits.

What is a credit card generator?

A credit-card generator generates bogus but legitimate credit-card numbers by employing the same algorithms that banks and card networks use to issue their cards.

Discard Card Generator may also utilise any bank’s BIN code (bank identification). Because produced cards are not linked to any bank account, they have no funds and cannot be used to purchase goods or services, although they are primarily used to test e-commerce payment systems.

What is Credit Credit checker?

CC checker is used to check the credit-card.

How much must I earn to be eligible for a credit card in Nigeria?

A salary earner with at least a 210, 000 gross monthly compensation, or an entrepreneur with a 210, 000 six-month average turnover.

Conclusion

Credit cards can assist you in improving your credit score, but only if used carefully. The two most important criteria in your credit score are your payment history and the amount borrowed.

For consumers with a low credit history, secured credit-cards are a choice.