Everyone likes to have a choice, but there is so much bright and glossy plastic out there it can sometimes make your head spin. Firstly, you should know the difference between the various types of cards.
Credit Card: Lets you borrow money and pay it back in monthly payments. It is largely down to you how much you pay back each time, but there is usually a minimum payment of £5 or minimum percentage of your balance, say 2 or 3%.
Debit Card: Is usually linked to your current account. Rather than taking cash out, a debit card means you can make quick and easy transactions, which show up on your account almost straight away.
Charge Card: Means you charge purchases to an account. Offers a monthly statement that needs to be paid off in full. Most issuers charge a membership fee.
Store Card: You will probably have been offered one of these while out shopping. They are a credit card offered by a retailer, so they restrict where you can spend. Relatively easy to get, but they charge high rates of interest on balances.
Affinity/Charity Card: Money goes to charity when you open an account, as does a small percentage each time you spend.
Cashback Card: Will pay YOU for spending on them. But if you do not pay off full balance every month, the interest goes sky high.
Credit Card: Lets you borrow money and pay it back in monthly payments. It is largely down to you how much you pay back each time, but there is usually a minimum payment of £5 or minimum percentage of your balance, say 2 or 3%.
Debit Card: Is usually linked to your current account. Rather than taking cash out, a debit card means you can make quick and easy transactions, which show up on your account almost straight away.
Charge Card: Means you charge purchases to an account. Offers a monthly statement that needs to be paid off in full. Most issuers charge a membership fee.
Store Card: You will probably have been offered one of these while out shopping. They are a credit card offered by a retailer, so they restrict where you can spend. Relatively easy to get, but they charge high rates of interest on balances.
Affinity/Charity Card: Money goes to charity when you open an account, as does a small percentage each time you spend.
Cashback Card: Will pay YOU for spending on them. But if you do not pay off full balance every month, the interest goes sky high.
Credit cards holder? Cheer up! There is great news coming your way. The Reserve Bank of India has asked banks not to charge excessive interest rates on personal loans and prescribe a ceiling rate on small advances, a move that will benefit card users across the country. Flooded with unsolicited credit cards offers? Well, not any longer, the RBI has said that unsolicited credit cards should not be issued.
In case an unsolicited card is issued and activated without the consent of the recipient and he is billed for the same, the card issuing bank will have to reverse the charges, and pay a penalty to the recipient amounting to twice the value of the charges reversed.
The banks should independently assess the credit risk while issuing cards to persons, especially to students and others with no financial stability. Banks need to be very careful while issuing credit cards.
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Issuing fresh guidelines for credit card operations, the RBI has also directed the banks not to reject credit card applications of customers without assigning reasons in writing.
The Reserve Bank of India had undertaken a study on the credit card operations of banks, based on the complaints it received. It has now come out with a list of recommendations.
Check out what the RBI has prescribed to end the woes of lakhs of credit card holders who have been subjected to various kinds of anomalies in terms of card issuance, usage, payment of fees, late payment and recovery of cards.
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