Credit Card

A credit card is used for purchasing goods either directly or through online and you can also withdraw money using it. They can help you in earning reward points while you make purchases, which in turn can be used beneficially in future The Credit cards charge interest for the amount you spend or withdraw. The borrow limit is set by the bank according to the financial status of the card holder. Credit cards will be useful when you run out of liquid money from your hands or your account. It consists of a printed number. The first 6 numbers denotes the bank, next 9 denotes the account & the last number is the validity check code.

  • Cardholder : Owner of the card.
  • Merchant : The store where you make purchases.
  • Acquiring bank : The bank that provides the POS machine or the software.
  • Issuing bank : The bank that issues the credit card.
  • Card network : The companies that process the credit card payments. The major card networks are Visa, American Express and MasterCard.

The additional features of credit cards are

  • To set up automatic deduction to paying bills.
  • To avail rewards such as reduced annual fee, flyer miles, etc.
  • Get overdraft protection on your credit card

The minimum salary required to get a credit card is AED 5000 in most of the banks.

Difference between Credit Card and a Debit Card ?

Both Debit cards and credit cards are accepted at the same places. A debit card takes money from your bank account and in case of credit card, the bank pays money on behalf of you & you, in turn, have to pay that along with the interest after a month. In order to use your debit card, you must always have a running balance in your account.

Protecting your credit card

You have to inform the bank immediately if your credit card has been stolen. Also, you have to monitor your bank statements & credit reports so that you can check any fraudulent transaction done. The bank will freeze the account & issue you a new card after proper investigation.

Credit card payments

You must pay the full amount that you spent using the credit card before that month ends. So that you won’t be charged any interest. If you didn’t make the payment on time & if it gets postponed to next month, then you will be charged with the interest. The interest rates for money withdrawal is much higher than the purchases.

Credit shield

Credit Shield is an insurance that may help in any unfortunate circumstances such as death, injury, or in some cases unemployment. This will be used to cover the outstanding amount in such kind of circumstances. Once you activate the credit shield, then you have to pay some extra amount in addition to your monthly card expenses, which in turn will help you in future. It can be used in such situations like.,

  • Natural Death
  • Permanent Total Disablement
  • Death Caused by Accident
  • Temporary Total Disability
  • Critical Illness
  • Involuntary Loss of Employment
  • Terminal Illness and Male or Female Cancer

Eligibility

  • A primary or secondary card holder.
  • Should regularly pay, at least the minimum amount payable on the outstanding balance.
  • Age from late teens up to 60 years of age.

Cash advance from credit cards

If the shop you are in, does not accept credit cards and you don’t have enough money in your bank account, then you can make use of the cash advance feature from credit cards.

Features :

  • No need for cash in your bank account.
  • No need to go to the bank to get the loan sanctioned, you can get money directly from the ATM itself.