Thursday, August 9, 2007

Credit Card in India

Just over a month ago, I got my Bank of Baroda(BOB) credit card and I am very happy with it. The approval process was quick and it only took about 2 weeks to receive the credit card from the date of the application! This is quite good since each application must go to the BOB Mumbai office for approval. There, a BOB representative will ring you and ask you some questions and verify some details. All going well, the credit card is sent through registered post at your home.

Generally to obtain a credit card, you need to have an annual income of 75,000 or more. Depending on high your annual salary is, you may qualify for a Gold credit card. You have the choice of Visa or Mastercard but really there is no significant difference between the two. The great thing about this BOB credit card is that there is no fee whatsoever provided you pay your bills in full all the time and you make at least 10 transactions per year.

Of course, there are times when you might want revolving credit - in which the customer does not pay the entire amount by the due date on their credit card. Still, you have to pay at least 5% of the total amount per month. So, if you made a transaction for Rs.1,000, then you must pay 5% of that (Rs.50) no matter what! The remaining amount of Rs.900 can be carried onto the next month but you have to pay interest on that. The interest is 1.99% per month on the remaining amount. Also, you have to pay service tax on the interest amount! Confusing? Well, remember that there is nothing to worry about if you pay all the bill amount per month as there is no fee on your credit card for lifetime!

Also, you can withdraw cash from your credit card but you have to pay hefty charges on the cash amount - about 2.5% of the amount. Generally, people do not withdraw cash from their credit card but use it for services and products at shops or on the Internet.

You can pay for the credit card every month via check or pay in cash at select Bank of Baroda branches.

So far, things have gone smoothly and I have used my credit card to make a number of purchases. Overall, a pleasant experience!

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