Free Credit Card
Data sourced from the Reserve Bank of India suggests that payments made through credit cards in India rose above Rs.6 lakh crore in 2019. Increase in the growth rate by 30% in comparison to Rs.4.6 lakh crore in 2018. This indicates that the use of credit cards for monetary transactions in our country is increasing.
Credit cards come with various utilities and benefits but they also require substantial maintenance such as annual processing charges, cash advance fees, etc. To avoid such additional payments, interested candidates can opt for a free credit card.
What is a free credit card?
Credit cardholders are often required to pay a pre-determined fee as per the terms and conditions of the card-issuing company. These are either joining fees or annual fees, levied on a credit card annually.
A free credit card is a regular credit card without the above-mentioned additional charges. Some free credit cards also provide 0% intro APR along with no charge balance transfer and foreign-transactions. Note that such offers are mostly introductory.
Things to know before applying for free credit cards
Before applying for a card with such facilities you need to be aware of the various additional charges that are applicable to credit cards –
Annual processing fees
Also referred to as annual fees, this type of charge is not included for free credit cards. However, several financial institutions offer such facilities only for a limited period on their free credit cards. It is usually the initial year of using the card.
Over limit fee
As per the maximum credit limit on your card, you are not allowed to exceed this limit without facing any penalty. Financial institutions are known to charge hefty fees for transactions beyond your credit limit.
This fee primarily depends on the total amount by which you have crossed the transaction limit. However, you can ignore such fines by availing free credit cards which let you make transactions over your credit limit without incurring hefty fines.
Cash withdrawal charges
A portion of your monthly credit limit is provided by the card issuer for cash withdrawal, which is the amount of funds you can withdraw from any ATM with your credit card. Cash withdrawal charges can prove to be quite costly as it entails a substantial cash advance fee based on the amount withdrawn.
Hence, applying for free credit cards that do not comprise cash withdrawal charges can help you lower your expenses during a financial crisis when you are required to withdraw cash urgently.
Late payment fees
If you are unable to pay your current outstanding amount on your monthly credit card bill, financial institutions allow you to pay the minimum amount due in order to avoid interest payment. However, if you are not able to pay the minimum due amount as well, not only will the card issuer charge a substantial rate of interest but also a late payment fee when you eventually clear your dues.
So, as a new user, you should learn how to use a credit card wisely to avoid accumulating debt. Moreover, the above-mentioned fees are calculated on the basis of your current statement balance. So, it is advised to opt for free credit cards to negate paying additional charges such as this late payment fee.
Although free credit cards help you in lowering your expenses by removing various additional charges, they do not offer the multipurpose benefits that you can avail from regular feature-rich credit cards like the Bajaj Finserv RBL Bank Super Card. You can accumulate accelerated reward points by purchasing at partnered outlets through this Bajaj card.
It is advised to choose the right card for yourself based on your spending habits. So, before applying for a free credit card you should check out the above-discussed processing fees.