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What is a Credit Card and How Does it Work

When you take a credit card, you can use the issuer’s finance to pay for transactions through the month and repay the amount as per your billing cycle. If you don’t make payments in full and on time, you have to pay interest, as this is borrowed money. Credit cards have taken the world by storm thanks to their many benefits. Not only do they let you make purchases, but they also allow you to build and maintain a healthy credit score. However, if you want to use a credit card, start by learning what a credit card is in more detail.

Here are 3 things you should know.

You can avail various benefits using a credit card

The most attractive feature of a credit card is reward points. Depending on the type of credit card you apply for, you can earn reward points on what you spend. On accumulation of points, you can redeem them to buy other items, thereby bringing down your expenditure. What’s more, some credit cards like the Bajaj Finserv RBL Bank SuperCard offer up to 20,000 reward points on joining and more once you cross certain spending milestones. To make the most of these points, remember to use them before they lapse.

The benefit of a credit card comes with a cost of borrowing

You can’t use a credit card entirely free of cost. Joining fees and annual maintenance fees are some of the charges you will have to pay. Apart from this, late payment of bills, ATM cash withdrawals, emergency loans, etc., attract a charge too. If you don’t pay your bill in full, you are likely to have to pay a high interest rate on the balance until you do.

In addition to this, you also have to pay charges and processing fees for special transactions such as balance transfer and international payments. So, learn about these costs before applying for a credit card. Consider a card that has minimal charges and offers maximum benefits. For instance, the Bajaj Finserv RBL Bank SuperCard offers 50 days of interest-free ATM cash withdrawals and a 90-day, interest-free personal loan. Both these facilities help you save significantly.

There are different types of credit cards to choose from

Credit card issuers have several types of credit cards. A fuel card, for instance, offers majority of its perks in the form of discounts, cashbacks, and reward points for fuel transactions. This means that when you use this card to pay for fuel, you will earn rewards and cashbacks for each transaction if its value is over the minimum set by the issuer. A shopping card, on the other hand, will help you earn rewards and discounts for all your purchases and you can also avail special promotional discounts on partner brands specified by your issuer, or extra points when you shop online, for instance. So, choose a credit card based on your needs, lifestyle and after evaluating the benefits you will truly be able to make use of.

Now that you understand the difference between a credit and a debit card and know what is credit card, go ahead and apply for one that offers amazing features such as the Bajaj Finserv RBL Bank SuperCard. It is a power-packed, multi-purpose credit card that also serves as an ATM card, EMI card, and a loan card. By paying minimal charges you can enjoy features like conversion of purchases above Rs.3,000 into easy EMIs. In addition, the card also helps you save over Rs.55,000 annually. Before applying, check your pre-approved offer from Bajaj Finserv. Use your personalised deals to apply and enjoy instant approval.

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