When I was discussing with one my friend, he proudly says that he uses credit card for every thing and pay the due before the due date, which makes him the most trusted customer for his bank. Here the important point is that, he even feels that it would improve his chance of getting more loan amount  if he applies for a loan because of his repayment history of his credit card. Is that true?.

Not only him, many has the wrong opinion on using the credit card and how it impacts the credit history when you applying for a loan. I would like to ask this question to my friend “Say if you are paying the monthly credit card bill of Rs. 30000 when your take home salary is Rs. 60000. That means that your total expenses is 50% of your income and it is deliberately known to the bank by seeing your credit card payments. If you have the remaining amount Rs. 30000, then how can you pay the loan EMI if it is Rs. 30000.” That is how banks would look into your credit history. This articles explores some of the key points about using the credit card and how it would impact the credit history. If you have any questions, please post it in the comments section. If you are interested in receiving the future articles, please subscribe here.

also read:

• Credit report from CIBIL
• How to apply CIBIL report online?
• How to Improve Your Credit History?

Credit card is a loan instrument

Many are not aware that credit card is a one kind of loan instrument for the bank customers. It is a temporary loan amount from bank with the free credit period where you need not pay the interest. Buying the most expensive goods with credit card and paying the EMI is one of the popular blunder by customers. The interest charged on credit card is very high.

• Buy: Change your relationship with money

When banks look into the credit card history while sanctioning loan amount for you, they consider credit card as the loan instrument. Obsessive use of credit card will lead to the less loan amount  eligibility. Be wise when you are using the credit cards. Also note that don’t fail any of the dues which will have the negative points on your credit report.

• How to Read a Credit Score Report?

How to mitigate the risk?

There are certain measures you can take to reduce the impact on credit history. The following are some of the points worth remembering:

• Don’t maintain more than one credit card on your name. Maintaining more than one credit card is not a good idea when it comes to the credit history. If you have any unused cards, please return that to the bank.
• Don’t ever fail to make the minimum amount due. This will have the penalty charges and the indications of failure to meet the due date. if possible pay all the amount in due date and avoid paying any extra interest charges.
• Don’t make all the purchases on credit card, that is not a good idea.
• Another very good option is, get a credit card on your spouse name and use it. If you are the only earning person and you only can apply for the loan, then try to get credit card for your spouse. That would reduce any liability on your name.
• Don’t run behind the reward points. Nowadays most of the banks and reward payment programs offering bonus points for using the credit cards. Don’t fall prey for those lucrative offerings.

I hope this article would have been more useful to the readers. If you are already using the credit card, lets understand the equations on how credit card interests are charged and how dangerous if you are not smart enough to mange them properly. If you have any questions, please write it in the comments section. We have more interesting articles in the coming days, stay tuned here.

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If you purchase or shop through eCommerce websites then they mostly accept the credit cards instead of debit card. Debit card also accepted, but credit cards are widely accepted like even you can shot in the foreign eCommerce websites like Amazon using the credit card. Credit Cards are used widely and it has few special advantages if you maintain without paying the interest charges for the outstanding bills.

• Request CIBIL Report Online

The interest rates charged against your credit card is much higher than any other loans products. Most of the people who own the credit card still not aware how the interest rates calculated on the credit cards. This article explores few facts on how the interest rates calculated and why you must be careful on paying the extra money. If you are interested in receiving the future articles, please subscribe here.

1. Interest will be charged on your credit card only if you have paid the partial or minimum amount due on the outstanding bills. This is called as ’revolving credit facility’.
2. There is a interest free credit period is available with each credit card. This period is defined between the day you purchased and the next amount due date. Till that time there is no interest is charged, unless if the last statement due is paid at the time of purchase.
3. If the credit card is on revolving credit, then whatever purchase you are making, the interest will be added immediately and there won’t be any interest free period if the card is in revolving credit period.
4. Credit card companies normally reveal the interest rates on monthly percentage. You must be very careful on realizing the annual rate for outstanding amount. This percentage ranges from 37-42%. It is very high compared to the home loans or personal loans.
5. A late payment fee will be charged if the minimum amount due is not paid on the due date. The fee also carries the service tax. Note that the late payment fee on credit card ranges from Rs. 200 to Rs. 700. This caries for each bank.

• Credit report from CIBIL
• How to Improve Your Credit History?

To understand how the credit card charges work, lets see the below table with example transactions:

In the example 1, all the outstanding amount is paid, so when you start purchasing after the due date, card holder will get the interest free period till the next due date.

In the example 2,  partially paid. The outstanding amount will be charged from the next day of due date. Also what ever new purchases you are making after the due date will be immediately charged and there won’t be any interest free period.

In the example 3, it is similar to example 2. Only difference is here the whole amount is pending.

I hope this explanation would have provided good idea on how the interests charged on your credit card. If you have any questions, please post it in the comments section. If you are interested in receiving the future articles, please subscribe here.

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In India, CIBIL is the first company to enter for providing the credit score and credit history for the bank’s customers. All the banks in India check with CIBIL for the details of the customer after receiving the application. Last week I have published an article about the online application to get the CIBIL report. This CIBIL report tells the details like your existing loan amount, what is the EMI and if you have missed any repayment schedule that too would be provided to the banks. Customers can request for this report and correct it if there is any mistakes in the data. In this article we will know about the new company Equifax to get the risk score. Please subscribe to our future articles here.

also read:

• How to apply for CIBIL report online?
• How to Improve Your Credit History?
• Credit report from CIBIL

What is Equifax Risk Score?

Equifax is the new entrant to provide the risk score for the bank’s customers. It is an US based company, entering to India for their support. Unlike the CIBIL report, Equifax promising to provide the risk level of the customers who are applying for the loan. That means, based on your financial status and loans, they would predict the possible default in your payment for the next 24 months. Banks can take this an additional details to approve the loan applications. Their site says:

It is especially important to validate the repayment abilities of new entrants to the consumer lending market, particularly for those where credit information / history available is limited.

How to apply for Equifax Risk Score?

At present, there is no online payment facility to get the risk score. They are accepting the payment only through the DD, otherwise they would not accept it. The following are the process:

• Look in to this page
• Fill this form completely.
• Take the DD for Equifax Credit Information Services Pvt. Ltd., Mumbai, Rs. 138 or Rs. 400. The report is of two types. (Equifax Credit Information Report without your Equifax Risk Score or with risk score).
• Take the identity proof as mentioned in their website.
• Proof of address
• Send to their address and keep the following points in your mind:
• All photo copies should be self-attested
• Please ensure that ID card numbers and photographs are clear and visible.
• All bills should be within 3 months from the current date.
• All ID proof documents with validity dates should be valid at the time of sending the request.
• The name and address on the documents should be of the request
• The address should be clear and visible

Summary

Since they are new to the industry, there are not many feedback in the market. Soon I would come up with the detailed review on their risk score and whether it could be useful for the banks. As of now all the banks are happy to use the CIBIL report because they are providing more details about the customers.

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Introduction

In this article I will be writing about the some of the important facts which needs to be reviewed on your credit card bills. Nowadays most of the banks not informing the customers about the fees change and there is no clear intimation. It will affect your expenses and have to handle this clearly. In this article I am writing to point few things how to avoid those extra expenses. If you like this article, please get the free email updates.

1. Avoid late payment fees

It is always keep in mind that the due date for all your credit cards. If you are missing the due, it will end up paying the late payment fees. Also periodically check for the due date, if there is any change by the bank.

2. Annual Fees

It is another expenses happening in the every year. If you taken the card with the life time free, then there should not be any fees for using the credit card. You have the rights to ask the company and they are responsible to provide the explanation.

3. Interest Rates

Learn about the interest rates of credit cards. There is lot of trick in explaining the interest rates by the banks. They will not tell you the annual rate for the credit cards. Because, it is higher than the other form of loans like Personal Loans, etc. It is always good to avoid taking the huge amount from the credit cards.

Summary

I hope this article will be useful to be aware of the credit card mistakes. This article explains only the few points. I will be coming up with another article which explains in more details. If you have any ideas please post it in the comments section.

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Introduction

In this article I will be writing about the some of the techniques used for closing the credit card debts in the efficient way. In the recent days, the default rate for the credit cards debt is increasing and banks are in the huge loss. SBI Cards alone losing more than 50 crore per month on the credit cards debt. It is the reason why nowadays credit cards companies tighten their policies to issue a new card. It is always good to track of your usage on credit card and also please monitor the due date for your credit card. The interest rates levied on credit cards are very high. This article explains some of the ways to get rid of unsecured credit card debts. If you have any doubts please post it in the comments section. Please subscribe to our future articles here.

1. Don’t skip the Due Date

It is one of the reason why most people are suffering the over debt in the credit cards. All the credit card companies offer minimum payment option before due date. If you have money, please pay the entire amount and don’t only pay the minimum payment and skip the due date. You will end up paying highest interest rates which will be much lesser than personal loans. Calculated your total debt payoff amount every month.

2. Don’t shop for more money if you cannot pay within due date

It is one of the big mistakes often people make. Don’t shop for more amount if you cannot repay the money before due date. If you are thinking that, you will pay the due like putting EMI. All the credit card companies offering EMI for the due amount. Remember that purpose of credit card is to take the loans, it is for instant purchase and payback when you get salary. If you need money where you will pay after six months, please go for personal loans.

3. Too many credit cards too much dangerous

If you have the mind set of having the many credit cards is fancy, no one will help you when you have more debt. It is good always stick with single credit cards. When you have many credit cards, there is more chance that you will forget the due date of the each card.

4. Learn about the charges,fees,etc

Credit Cards have the lot of hidden charges which will increase your due amount. Talk to the company and learn about the charges and fees associated with your credit card. Analyse the each month bill to check if there is any unknown expenses add into the bill. It happens frequently when customer is not caring about the bill details.

5. Set the remainder for due date

I use this technique to avoid missing the due date. I use Google Calendar to send the SMS notification for the important due dates. You can set up your mobile number and receive the notification messages. I like this application because it is free and more user friendly. I would recommend to use Google Calendar for setting the remainder, not only for due date for any other events.

6. Create online account

It is one of the easiest way to monitor your credit card bill. Many of us have the online account, if you don’t have one, please create the account and monitor at your desk. You need not call every time the customer support.

7. Choose e-bill to save the environment

Don’t opt for the paper bill unless it is required for any other purpose. I would recommend this for every other account you have with the banks or mobile bills, etc. It will help to save the environment.

Summary

I hope this article would be very helpful and eye opener for those who are suffering from the credit card debts. Follow the tips I have provided in this article and run the happy life by avoiding too much debt. If you have any doubts Please post it in the comments section. Thank you for reading this article.

Assignment

I would like to give you a task after reading this article. I know I would have missed good points related to managing the credit card debt. If you feel that you are efficient user of credit cards, please post your ideas in the comments section. If the point is really good, I will keep updating this article with new points.

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Introduction

We have reached the end of march 2009, this article will provide the recap on what is happened in March 2009 on Think – Plan – Invest. This is the first article writing about the monthly overview and it will continue from this month. Every month end I will be writing about the overview of all the articles published in the same month. That will give the users to get easy glimpse on all the articles. I would like to hear feedback from you about the monthly overview. You can post it in the comments section. Subscribe to our future articles here. The different topics covered in this month are:

• Home Loans

• Builders in Bangalore

• Tax Planning

• Capital Gains

• Fixed Deposit

Home Loans

I have written many interesting articles about the home loans in this month. I would say the current month gives plenty of knowledge to readers about the home loans and the different type of home loans. The following are more popular articles about the home loans.

Documents required for Home Loans Application

It is one of the important part while you apply for a loan. Without all the documents required for processing the loan, you will not be eligible to apply for home loans. It is time to understand what….

Check list for Home Loans

If you are not aware of all the fees and hidden charges on the home loans, you will have to pay more money that you would have been saved if you analyze the home loans with different….

Submit Original documents for Home Loans

In this blog I will be writing about the submitting original documents to the bank for getting the loan amount. Most people are hesitating to submit the original documents to the banker because of the safety. This blog post explains the legal rules related to submitting the documents.

What is Home Loans Top Up?

The top up loans are god send when you are in the urgent need of money. There is some restrictions for santioning the top up loans. This article will present you the clear idea on top up loans and the tax benefits…

Processing Fees for Home Loans

Customer has to be very careful while reading the instructions on home loans and this article will explore few of the important facts about the processing fees involved in the home loans. I would like to answer…

Tax Benefits on Home Improvement Loans

Many people not aware that you can apply for the loan if you are willing to reconstruct the existing house. More than that you are eligible to claim the…

Insurance Cover for Home Loans

Don’t confuse with the home insurance and the home loans insurance. There is clear difference between home insurance and home loans insurance. Here I will be explaining the reason for the home loans insurance and why one has to choose…

What is EMI and pre-EMI?

Most of the people heard about the EMI, not aware of the pre-EMI and the benefits involved in the pre-EMI. In this article we will look into more details about the pre-EMI and in what situtation pre-EMI can be benefited your…

Switching Your Home Loans to Another Bank

Switching home loans will give you some advantages of saving your money. This is normally done when another bank offers very less interest rates compare to your existing interest rates on the home loans. It….

Builders in Bangalore

Mantri Projects in Bangalore

In this article I have posted few ongoing projects by the Mantri developers in Bangalore . The details presented here is taken from the Mantri’s official website.

DLF’s Westend Heights New Town – Bangalore

DLF brings its new residential project New Town
in Bangalore. DLF offers 3 bedroom apartments with excellent amenities. DLF New Town is a premium residential township with a appending Spanish style of architecture against a backdrop of fabulous gardens. It features an open-layout with buildings being placed in a manner that

Tax Planning

Tax Planning for 2009 – Part 1

How ever the budget is not yet announced, we have to wait till the election is getting over. But, learning some tips for the tax savings is important before submit your tax declarations. If you have not saved anything before forget it and

Capital Gains

Should I pay taxes for capital gains?

Here I mean capital gains is the profit which you are making from selling your fixed assets like land or houses. Most of the people think that the profit from selling the propety doesn’t come under the tax liability. That is

Capital Gains on Agricultural Land

That is only the basics and many scenarios will arise when you are facing it in the real life. In this article I will be writing about the capital gains related to selling the agriculture

Fixed Deposit

Mahindra Finance Fixed Deposit Scheme

t is Mahindra Finance Fixed Deposit scheme.  In my previous article I have written about the Tata Motors Fixed Deposit Scheme. Tata Motors is the first one to come up with this type of scheme, follwed by Mahindra Finance.

Tata Motors Fixed Deposit(FD) Scheme

As we are aware of the fixed deposit with banks, nowadays many corporates started rolloing out the fixed deposit schemes to the public to collect money. The one advantage with this option is they are providing you the highest interest rates compare…

Fixed Deposit for Monthly Income

very penny you spend will be important. The tough times will not be end within another couple of months, it is expected to continue for another few years atleast. If you read everyday newspaper, there is millions lost job and don’t have work todo.

Summary

This article summarize the articles published in March 2009. I have posted here only the popular articles which got more attention. In the next month I will try to cover many different topics like insurance,Tax Planning,etc. Thank you for reading the article. Please post your feedback in the comments section.

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In this article I will be writing about the Prepaid Credit Cards. This is another type of card system used for spending the money. But, it is not an credit card and mostly it is used by the teenagers. This article explains the purpose of the prepaid credit cards and what are the hidden fees included in using these cards. If you have any doubts, please post it in the comments section. You can subscribe to our future articles here.

What is Prepaid Credit Card?

First look into the meaning of  prepaid credit cards. Unlike credit cards, prepaid credit cards will not offer you the credit limit. You have to deposit money to your card and will use the card for shopping. Why should I deposit my own money and spend it later?. This card is intend to attract the teen lagers and are minors eligible to apply for the prepaid credit cards. For example parents can get a prepaid credit card in their child’s name and give it to them for their use. They need not wait for the parents to make shopping from the credit cards. This is the main purpose of the prepaid credit cards. The prepaid cards are carrying the same brand like Visa and MasterCard. So, it will be used anywhere in the world.

Prepaid Credit Card Fees

There is no interest payment involved in the prepaid credit cards. But the banks are charging more fees to use the card and charging service fees too. This makes the prepaid credit cards become expensive to use our own money.

Because of the many fees that apply to obtaining and using credit-card-branded prepaid cards, the Financial Consumer Agency of Canada describes them as “an expensive way to spend your own money”.The agency publishes a booklet, “Pre-paid cards”, which explains the advantages and disadvantages of this type of prepaid card.

Summary

In this article I have written about the prepaid credit cards and its purpose. There are many types of the prepaid credit cards or smart cards available in the market and almost all the banks are offering the prepaid credit cards. In my future articles I will be writing in details about different types of prepaid credit cards. Thank you for reading the article!! If you have any doubts please post it in the comments section. I am happy to answer all your queries.

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In this blog I just want to share my experience on with drawing the amount from my PayPal account to my SBI card. This is first time I am doing this kind of transaction.

About PayPal

If you are new to the term PayPal, PayPal is the leading online payment method maintained by the eBay. Those who are doing the online services and want to receive and send money from other countries, PayPal is the God’s gift. It is easy to send and receive money just using their website. For every transaction they will be charging you some fees. When it comes to the developing countries like India, the improvements on the PayPal features are very slow.

In India, we have more options as we can able to with draw money to our local bank account and credit card. The amount will be converted to our local currencies. Last week only first time I have used credit card with draw method. Just want to share the experience.

Time Taken for Creditting to your SBI Card

When you are with draw money to Credit Card, it is the two process involved. Once I done the transaction, I could see the details in my SBI card statement but the amount is not credited and it shows as .00m. I got confused and called to the SBI card support to clarify my doubt.

From their answer, I came to know that it may take upto 45 days for the conversion of USD to INR. But, when transferring to the bank, it happens within 5 days. I am not sure when it will be credited. I will update the post soon with more details.

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