A credit card, also known as a charge card, allows you to pay for goods and services with your credit instead of paying cash upfront and waiting to be reimbursed later. You’ll still need to pay off your credit card balance every month, or you’ll be charged interest and other fees that can increase the cost of any purchase significantly. That’s why it’s essential to use your credit card wisely, by only charging things you can afford to pay off at the end of the month and never spending more than you could save if you were using cash.
Understanding your credit history
Your credit history, or credit score, helps lenders decide whether you’re likely to pay back your debts. If you don’t have an established credit history and are thinking about applying for your first card, it’s expected that you’ll have to get an unsecured one — which means there won’t be any collateral at stake if you default on payments. For most first-time credit seekers,
it’s best to start with a secured card. Secured cards require an upfront deposit (usually equal to your maximum spending limit), but they help establish more easily recognized credit lines.
Other important factors include how long you’ve had your accounts, how much you owe, and whether you’ve been late with payments.
Typically, your history will be broken down into five categories: payment history (35%), amounts owed (30%), length of history (15%), new credit accounts (10%), and types of credit used (10%).
The longer your debt has been outstanding and well-managed, plus any additional cards and loans you have on file can help improve your rating. Your other payment obligations — such as student loans, car payments, or rent — aren’t usually factored into your score.
Credit score explained
What’s Next with Credit Cards? : To get started, it’s essential to know what constitutes a credit score. It’s basically a three-digit number that represents your borrowing history. The higher your score, the better you are at handling debt and paying bills on time.
A credit score is used by lenders to gauge your trustworthiness and ability to repay debt. It’s based on information from your personal credit report, which contains detailed info on how you’ve handled previous loans, like mortgages or car loans. You’ll usually see two different scores: one from each of these companies called Experian and TransUnion, respectively.
Each will vary slightly, depending on where you live or what type of loans you’ve taken out in the past.
But what exactly makes up your credit score? It’s based on five factors:
- Payment history—35%
- Amounts owed—30%
- Length of credit history—15%
- Recent inquiries—10%
- Types of credit in use—10%
Your payment history makes up 35% of your score. Basically, it’s how you’ve handled past debt. If you’ve always paid your bills on time and avoided late payments or defaulting on loans, you’re golden! The amounts owed make up 30% of your score. The more debt you have, especially if it’s overdue, will hurt your score.
Different types of credit cards
The most commonly used cards are charge and credit cards. A charge card allows its holder to make purchases above their approved spending limit but requires payment in full each month. Credit cards, on the other hand, will enable you to pay over time by paying interest on what you spend beyond your initial deposit amount (known as your credit limit).
The maximum length of time that you can be charged for any given purchase varies from issuer to issuer, but it’s typically three to six months.
Another difference between charges and credit cards lies in whether or not you have to pay interest on your purchases. Both types of cards are used for making purchases, but when you use a charge card and make a purchase that’s above your spending limit, you are required to pay it off in full immediately.
Credit cards, on the other hand, allow you to make purchases above your spending limit and then pay off your balance over time. The interest rate you pay on your balance depends on how much money you’re borrowing (your credit limit) and how long it takes you to pay it back.
What that means for you is that if you don’t pay your balance in full each month, you’ll be charged interest on any purchases beyond what’s covered by your deposit.
Achieving higher limits
First of all, maintain good payment records, so you have a track record to show lenders. Also, check your credit report at least once a year to make sure there are no errors that could be preventing higher limits. Make sure you pay on time, every time.
Don’t forget to ask for more if you feel like your limit doesn’t reflect your current spending ability. If all else fails, shop around for another bank.
If you have an ATM/debit card, be aware that your available balance may not always match your actual balance in a checking account or another source of funds.
For example, if you have $200 in your ATM/debit account and then pay for $100 worth of groceries using your debit card at checkout, you will only have $100 available for other purchases until funds are deposited into that account.
Choosing the right bank and credit card
Choosing your bank and a credit card can be daunting. There are so many factors to consider, like interest rates, minimum salary requirements, credit limits, and more. But don’t worry; you’ve come to the right place! Here we compare banks and their various offers so that you can decide which one is right for you. We also have some tips on choosing a credit card – including what to look out for – as well as how much salary you need in order to qualify for one.
A credit card allows you to make purchases on your own terms, not cash. In other words, when you use a credit card, you’re borrowing money and paying it back with interest. So if your bank offers 0% interest for six months, and you don’t pay off your balance in that time frame, then any further purchases will be charged an interest rate of 13-25%. This can quickly add up!
Also Read : The 10 Biggest US Banks
Checking your IDFC bank account balance
The easiest way to check your IDFC bank account balance online is by logging into your Internet banking account. In case you do not have an internet banking facility, it will also be possible to check your balance using Automated Teller Machines (ATMs).
You may also call any of IDFC Bank’s customer care centers or visit its branches to inquire about your account’s current balance.
The minimum salary for IDFC bank credit cards is Rs. 18,000 per month. However, if you are applying for an international or a Gold credit card, you will have to be employed with your employer for at least six months before being considered eligible for one of these cards.
In addition to these requirements, applicants must be aged between 21 and 65 years old to avail of IDFC Bank’s personal loan or credit card facility.
Minimum monthly income required for Indian credit cards
All Indian banks, including IDFC bank, want to make sure that you can maintain your finances and manage payments before issuing you a credit card. To become eligible for an Indian credit card, applicants must have at least an annual income of INR 100000 or $1550. Credit cards are mainly issued to individuals who already have savings and assets because they want to improve their financial health in the future.
The minimum monthly income required for Indian credit cards can vary between banks. For example, HDFC bank sets their minimum monthly payment at INR 500000 or $7505, whereas Axis bank has set theirs at INR 750000 or $12500.