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Who Actually Pays for your Credit Card Benefits? Should I own a Credit Card? | Nitish Rajput | Hindi - YouTube
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RBI had to issue a notice regarding No Cost EMI.
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This is a fraud that most companies do.
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And banks want you to miss EMI so that their other options get opened
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As much as the bank pushes you to take a credit card, it does not do it for anything.
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Today, when people sell balloons filled with air.
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Why is the bank giving you everything for free?
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By increasing your buying capacity
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they spoiled your habit so that
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You can also buy those things which you should not buy.
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Whose salary is 30,000 to 35,000 he is buying an iPhone from EMI
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This gets you into the debt trap.
It is deliberately named No Cost EMI.
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You can see,
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It is never called interest-free EMI or no-interest EMI.
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We use the bank to withdraw or deposit money.
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or take a loan,
To withdraw and deposit money
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Debit cards are available so that we do not have to come to the bank.
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Similarly, if you want to buy something,
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Credit cards are available for availing of short-term cash loans.
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It is not given to all, it has been given to those on whom the bank trusts.
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People who earn by working every month.
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The bank does not earn from the manufacturing plant
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people deposit their money in the bank
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And the bank gives that money on loan and earn interest
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And interest is a major way to earn money.
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Therefore, the more people take a loan, the more it will be beneficial.
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Taking a loan from a bank is a very complicated process.
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we have to go to the bank frequently
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Verification is done, we have to give cancel cheque and many more
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That is why a person takes a loan only when there is a great compulsion.
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That's why the bank started giving credit cards
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which are a short version of the loan and its access is very simple
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The Bank has given an easy digital card to its trustable customers.
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So that people's habits get spoiled.
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Because when someone takes a credit card
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So he doesn't feel like he's taking a loan
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They feel like this is a need for an emergency
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So we keep this.
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And as soon as he takes the credit card the bank introduces the offers
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The offers are also very interesting.
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Loan without any interest for 50 days
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And keep paying EMI throughout the year.
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Cashback, reward points
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Free movie tickets, no cost EMI but have you ever thought that
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Why is the bank giving everything for free, iPhone worth ₹1lakh is given to you for a year at No Cost EMI
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Without any interest, what is their advantage in this
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They are giving it to an unknown man,
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On today's date, when people sell air tied in balloons.
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So why is the bank giving everything for free?
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After spending on staff and marketing,
The bank is not doing charity.
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Unless the bank earns it, it will not give you anything
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The money for all these things is taken from your pockets and how it is taken, now you will understand
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When you use a credit card there are certain rules for using a credit card.
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Which the bank has named the credit card cycle
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If we understand it by example
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a credit card whose cycle is from April 1 to May 1
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That means
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All the shopping you will do from April 1 to May 1
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Its bill will be generated on the second day i.e. on May 2.
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And you can pay it after 20 days.
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This means if you have bought something on 2 April
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So you get 50 days to make payment and the bank gives you time because
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In this period from 1st April to 1st May, In this, you can shop more and more using your credit card.
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And every transaction of yours will benefit the bank.
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This is the first way for the bank to earn from you
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To understand this whole game you have to understand one thing
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That is a network company
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Network company means a visa, master cards, American express they are network company
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And the name of the network company in India is Rupaye
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A long time ago when ATMs were new, you could withdraw money from the ATM of the same bank
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If you have an ICICI Bank debit card, then you can withdraw money from ICICI ATM itself.
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While the technology of ATM credit card
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was the same for every bank
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If banks wanted, they could allow using each other's ATM
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But even after that, they did not allow to use it because
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For that, the bank would have to share the details of the customer amongst themselves.
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And if that were the case, their customer details would have gone to their competitors.
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If ICICI premium customer details are gone to HDFC Bank.
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so there's a kind of fear
If HDFC gives good offers to their premium customers.
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And make them their customers.
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By using common ATMs, both the banks are reaching each other's customers.
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In any business, no business will share its customer's data with its competitor
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so their fear was genuine
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Here network company comes into the picture such as visa, Mastercard
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American Express, Rupay
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They said that in this way every bank is at loss, Many machines will have to be installed in India.
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We will have to invest a lot of money and infrastructure
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So you do one thing that don't share the details of the customers amongst you.
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Give these details to us
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We will verify the details of whoever brings the ATM
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And as soon as the details are verified.
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Allow each other to perform transactions at each other's ATMs and the details of customers
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will not be shared with anyone we will keep them very secure with us.
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And this policy has been accepted by every bank.
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Since then you can withdraw money from any bank's ATM with any bank's debit card.
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Similarly, you have a credit card from any bank
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and the shopkeeper has a machine of any bank, it works in everything.
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It is done through a visa, MasterCard
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All the people who do money transactions using the card.
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Everyone's data is with the network company
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Visa and MasterCard are American companies but
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The government has imposed this rule, companies will have to keep all the data from India
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within India.
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That's why their data centres are in India,
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By using a visa, or Mastercard you make transactions all over the world
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Any bank in the world will verify your data with the network company
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And let you make the transaction
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Network companies are doing so many things
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And maintaining their data centres, so they will not do this for free of cost
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How a bank and network earn money on each transaction
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Let us understand this with an example,
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When you purchase anything with your credit card
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4 parties are involved in each transaction, network company, issuer bank
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Acquiring bank and shopper keeper
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I have told you about the network company, the second is the issuer bank
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Issuer bank is the bank whose credit card you have
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If you have a credit card from HDFC Bank
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In this case, the issuer bank will be HDFC Bank.
The third is acquiring a bank
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The bank whose machine the shopkeeper uses to deduct money from your credit card
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That bank is called an acquiring bank.
If the shopkeeper has a machine of ICICI Bank
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In that case, ICICI bank is acquiring the bank and 4th person is a shopkeeper
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Suppose you have bought goods worth ₹ 100 for its payment
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you took out HDFC Bank's credit card and
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shopkeeper deducted money by putting the card in the ICICI Bank machine
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In this case, HDFC Bank is the issuer bank and ICICI bank will be the acquiring bank
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As soon as you put your credit card in the machine
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Network companies like MasterCard, Visa, and American Express
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will verify the details of this transaction.
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will approve issuer and acquiring bank
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As soon as the approval from the network company will come
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Issuer Bank will give ₹98 to the Acquiring Bank And the issuer bank will keep ₹ 2
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And acquiring bank
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will keep 1 rupee from ₹98 and will give ₹97 to the shopkeeper
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Out of that remaining ₹ 1, the acquiring bank will give 50 paise to the network company
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And the acquiring company will retain 50 paisa
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By the transaction of 100 rupees
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The bank whose credit card you have, that bank earned ₹2, The network company earned 50 paise.
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The remaining 50p is earned by the machine's bank.
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This was an example to explain.
The percentage keeps changing
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This is the reason why the shopkeeper refuses
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Or ask for extra money when you use a credit card
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Shopkeepers of a metro city, or the shopkeepers in the mall
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They are one step forward.
They have already added the amount to the product.
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This amount seems very small but
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There are so many transactions done around the world
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So it turns out to be a huge amount, this is the reason why
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Visa and Mastercard are growing so fast.
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Valuation of visa company is more than 450 billion dollar
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And the valuation of MasterCard is around 340 billion dollars
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These companies are the biggest payment processing institutes
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And their growth has been very good in 5 to 10 years.
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You are watching this video on youtube.
You subscribe to Netflix or Spotify with a credit card.
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Or shop from Amazon from your iPhone, these companies are US based
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With recent correction
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Major US companies like Amazon, Google, Tesla
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And the prices of apple stocks reduced a lot and experts are saying
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This is the best time to invest in US stocks because these big companies will grow in the long term
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Earlier investing in US stocks from India used to take a lot of paperwork, commission and
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Brokerage changes
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But now with the IND Money app, you can invest in US stocks from India without any brokerage
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Commission or account opening fee and the best thing is with this app
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You can also buy stocks in fractions and you can also set up SIP
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On a monthly and weekly basis with only 500 rupees
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And I am giving you stocks of apple company worth rupees 750 for free with IND Money
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You just have to download IND Money from the link mentioned in the description
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And you have to sign up
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You will get apple stocks worth rupees 750 for free while depositing funds for the first time
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in your free US stock account
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From the point of portfolio diversification
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You can start your US stock investment journey from IND money
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In this whole case when the transaction is done
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The issuer bank is a bank whose customer credit card is used.
Keeps the highest profit
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This is one way,
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Along with this issuer banks earn in many other ways
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Transaction charges, late payment charges, EMI interest charges, cash withdrawal fees
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Over limit fees, annual fees
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Apart from this, by tying up with many other companies, with a point redeem scheme
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There are several ways from which the issuer bank earns a lot of money.
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This is the reason why each bank wants to be an issuer bank in every case
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This is why the bank wants to give you their credit card.
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To become an issuer bank the banks put their staff behind you everywhere,
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from the mall to your phones and SMS
by any means
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they want you to buy their credit card.
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Banks do not push for anything as much as they push you to get a credit card.
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You can get an idea of how much the bank benefits by giving a credit card.
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12.7% of people default on credit card
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Even after they are unable to give money, the bank remains in profit.
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Even after they don't stop here, they play a variety of tricks with you
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In no cost EMI also you are in loss
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Regarding no-cost EMI RBI had to issue notice, this is a fraud
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that most companies do
Many things are hidden from the customer
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It is deliberately named No Cost EMI you can try
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It is never being called any interest or interest-free EMI
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Because if they had done so, they would have been proved legally wrong in court.
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How does No Cost EMI work?
Let us understand this with an example of a mobile
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If a customer wants to buy a mobile so the customer has three options
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First, go everywhere and check the rate and buy from where it is less in price
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whether online or offline but the bank doesn't want that, the bank wants you to use a credit card
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and buy on EMI, the first benefit is product get more sells
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Earlier when a mobile company was earning 10,000 by selling 1,000 mobile phones
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Maybe now they start earning 30,000 by selling 3000 phones
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Because the option of EMI increases the purchasing power of the people.
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And people buy more.
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And when the mobile company earns more
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then they will share more profit with the bank.
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Secondly, when you buy something on EMI, it works like a loan.
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And you have to pay a loan processing fee
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You are not told that,
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Later when you see the statement, It is written in it.
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This increases the cost of your mobile.
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Thirdly, the amount of interest is already added to the total price
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and as soon as you opt for the EMI option
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All your offers are cancelled and in this way the price of the mobile increases
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There's one more thing in no cost EMI option
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First, they take the interest amount from you
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And when your EMI is completed, they return it to you by saying cashback or bonus.
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If someone does not take interest from you on EMI why would he take the first and return you later?
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They will not take it from day one
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its because GST is levied on the interest amount
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And the amount of GST also has to be paid by the customer you will know when you see your statement
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But this thing is not told to you and this also increases the price of the mobile.
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Some credit card companies give offers and
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It says that there will be no interest for the first 6 months.
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Interest will be applicable on the remaining 6 EMIs
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In this case, these people cover their amount by increasing their interest rate.
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If the interest rate is 12%, then they will not charge interest in the first 6 months and
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for the remaining 6 months, a 24% interest rate is charged. In the EMI option,
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you are not able to bargain. In this way, you also lose 1000 to 2000 rupees
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In this way, the interest you save, you have to pay double the amount of it
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This is about the case where they are saying that there is no EMI.
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And where they have said that they will take an interest, there it becomes more expensive.
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They keep no-cost EMIs on old or outdated products which do not sell.
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There is a simple fact of No Cost EMI.
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Sell more, sell fast and sell outdated
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Now you will say whether someone should use a credit card or not.
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A credit card makes a person feel like he has money
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Even though he has no money.
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if you watch this carefully
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you are buying stuff on credit
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Now you will say what is the big deal. At least we don't have to ask anyone for money.
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We don't have to take any loans. If we are spending extra money
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We saved our honour. When you take a loan from the bank, you take it for very important work.
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If you look at your credit card statement
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whatever you bought
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Was it used in an emergency?
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By increasing your buying capacity
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Your habits get spoiled
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So that you can also buy stuff which you should not buy
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If there is no EMI option
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Will so many people buy an iPhone by paying so much money at once?
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Due to the option of EMI, whose salary is 30,000 to 35,000 is also buying iPhone
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And this gets you into the debt trap.
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You buy a phone worth rupees 1.5 lakh for 2 lakh by paying more interest.
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And after that the job you were doing on your own terms
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You have to do it under compulsion.
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After this, the option of a minimum amount is given to you.
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This is the kind of trap if you keep making the minimum payment.
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So you will keep paying money throughout the year even then it will not be completed
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Banks want you to miss the EMI, this opens up the rest of their options.
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The penalty charge on the late payments is 2 to 3% monthly
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If we consider 2%, then 24% of the year.
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This is too much.
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if you are late for 1 day so they don't take interest in one day
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They charge interest for 45 days. You must have seen it in old movies
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The landlord mortgages the land of the poor and gives money to them
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He makes them work for the rest of his life Even after that the money is not complete.
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The credit card is the landlord of modern times.
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If not used properly it will get you in big trouble
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A credit card is a very good tool if used properly
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With a credit card, you have to buy only the thing whose money you have.
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If you buy the product thinking that you will become rich later
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When you buy products without thinking
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You will be stuck in a debt trap. Suppose you want to buy 1.5 lakh iPhone
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You can also buy it with a credit card.
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The money you saved to buy the iPhone.
you have to give it after 50 days
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You can also use that money as a short-term FD.
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which is for 1 month and with the interest that will come from it,
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You will be able to reduce the cost of your iPhone
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Whenever you use a credit card
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You always have to make full payment.
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Don't get into the trap of paying the minimum amount.
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In some cases, you should never use a credit card like petrol pump,
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There 1% service fees And around 7.2% GST is charged,
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Service fee is refundable in some cases
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But you have to pay GST,
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Second when you book in IRCTC
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1 to 2% is charged extra
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At that time you should never use a credit card
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Never use a credit card to add money to the wallet of Paytm,
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G pay, Amazon pay
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You have to pay a 2 to 3% fee plus you also have to give GST
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You should never withdraw cash from the credit card
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Otherwise, you will fall into a very bad debt trap
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balance transfer, you should never pay from one credit card to another.
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Interest rate and processing fees will be charged additionally.
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Never use a credit card to pay them insurance or LIC premium
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They charge 1 to 1.5% additionally
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Credit card bills should not be paid by cheque and cash.
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In that too we have to pay extra charges from 300 to 500
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When you are buying a credit card
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At that time too you should be careful firstly you should see
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that what type of credit card you are using.
You are using flight one or twice in a tear
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For that, you took flight and lounge credit card
It will not be beneficial to you
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If you buy more things from Amazon, then buy an Amazon Integrated Card.
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So that when you shop online, you will be benefited
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Another thing if you make a late payment
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So which card is taking the highest penalty?
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You should also compare interest rates
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You should also compare credit card annual fee
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Either it should be very less or it should not be.
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Some people even say that it is a free card, There is no fee for the first year
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but later they start charging
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You have to confirm this too
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And which bank card you should use,
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you can decide by reviewing 20 to 30 products on Amazon and Flipkart
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Which bank card is offering more
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People who are already caught in the credit card trap
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And by paying the minimum payment every month they are just surviving
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But your credit card will never run out by paying the minimum payment
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You keep giving money but it will never end.
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Because it charges high interest.
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It charges around 36% yearly
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If you want to get rid of it
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The only way is to either borrow money from a friend, pay it and get rid of it
Or take a personal loan
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And pay with it
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Because you will get a personal loan at 14% to 15% that is very less than 30%
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At Least the time for which you have taken your loan will be over.
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Because by paying the minimum payment it will not end.
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Any loan you have whether it is a car loan or a home loan
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Or personal loan remember one thing
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You have to end the credit card first.
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Because the interest on credit cards is very high
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Before ending the video
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From the description link by signing up on the IND money app
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Don't forget to claim free US apple stocks
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IND money app is a safe app and more than 5 million people are using it.
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