🔍
கடன் அட்டையின் விவரங்கள் | Credit Card Information - Billing cycle, Bill Statement, Payments | Tamil - YouTube
Channel: Anand Explains
[8]
Let's see the basic information on credit card.
[11]
Most of us started using credit card.
[14]
If you know how to use credit card wisely, it is good to have.
[18]
Incase, if you are unaware of the risk involved in credit card, you end up in debt trap.
[23]
It will be difficult to get out of the debt trap.
[26]
So, it is necessary to know the basic information on credit card.
[29]
Here, let's learn about credit card.
[35]
What is credit card?
[37]
It is a card which can be used to borrow money from banks.
[43]
Banks issue credit cards as a financial service to make money.
[52]
We will see how these banks make money from credit card, shortly.
[59]
As an individual user, we should be knowing how to use credit card wisely.
[64]
To use wisely, we should know about how credit card works.
[69]
Credit card interest rate is the highest among any form of loans. It is around 40% per annum.
[81]
There are different types of credit card available in the market.
[87]
Here, we are going to learn about basic credit card information.
[93]
First, as I mentioned earlier, you can get loan using credit card.
[98]
Let's see. In what form, you can access the loan using credit card?
[104]
There are three forms. One, CREDIT.
[106]
'CREDIT'
[108]
For example, you can use your credit card to pay for products or services
[115]
by swiping the credit card in the shop.
[117]
Similarly, for online purchases, you can pay using credit card by giving the card details.
[127]
Additionally, credit card can be used to book tickets and to pay bills.
[136]
Second, CASH ADVANCE.
[138]
Cash can be withdrawn cash from ATM using credit card. It will cost you extra fees.
[145]
Third, BALANCE TRANSFER.
[146]
Balance transfer is the process of transferring funds from one card to another card.
[154]
These are the three ways of how credit card funds can be consumed.
[157]
Next, there is a limit in Credit Card.
[161]
'CREDIT LIMIT'
[163]
It varies with card types, banks and individual users.
[168]
For example, if your credit limit is Rs.1 lakh,
[172]
then you are only allowed to spend upto Rs.1 lakh.
[175]
Certain percentage of the credit limit can be used as cash advance. Here, we say Rs.80,000.
[181]
These limits are set by credit card issuers (banks).
[183]
Credit limit for balance transfer is as same as regular credit limit.
[191]
Next, costs involved in using credit card.
[196]
The first cost is annual fees. It has to be paid every year.
[205]
Second cost is Interests. It will be charged for the expenses, cash advance, and balance transfer.
[222]
Next cost is Fees & Charges.
[224]
For example, Late payment fee.
[227]
It will be charged when you fail to pay your payment on time.
[236]
Similarly, Over limit charge.
[238]
For example, if you spend more than your credit limit, you will end up paying overlimit fee.
[246]
Next, Cash Advance Fee.
[248]
This fee will be charged when cash is withdrawn from ATM using credit card.
[252]
Like these fees, there are many other fees in credit card.
[258]
Next one is Surcharge.
[260]
Surcharge is kind of service fee.
[262]
Surcharge is charged for railway ticket bookings and for filling fuel.
[275]
So, these are the ways credit card issuers make money.
[279]
In other words, these are the costs involved in credit card usage.
[283]
Okay. What are the benefits in credit card?
[287]
Credit card issuer gives rewards to the user. Rewards in the form of
[291]
'CASHBACK'
[294]
'POINTS'
[295]
'MILES'
[297]
Cashback Reward.
[299]
For every Rs.100 you spend, you may get Rs.1 as a Cash reward.
[303]
Or, for every Rs.100 you spend, you may get 1 or 2 points as reward.
[307]
These points can be redeemed as physical product or cash.
[310]
Similarly, for travel credit card, you get miles as rewards.
[315]
These miles reward can be redeemed when flight tickets is being booked.
[320]
These are the rewards that the credit card companies provide to attract customers.
[325]
Next, when you spend using credit card, you have to pay the bill at some point of time.
[331]
To know that, we have to learn about Billing Cycle.
[335]
As an example, let's start with Month-1. There is always a specific date on every month.
[343]
The period between the specific date of Month-1 and that of Month-2 is called STATEMENT PERIOD.
[347]
The Specific date is called STATEMENT DATE.
[350]
It can be called as BILL DATE.
[352]
This is the date, the bill is created.
[358]
From the bill date, 20 days forward, there will be PAYMENT DUE DATE.
[363]
This is the date, before which the bill amount has to be paid in full or partial.
[371]
These 20 days are considered as GRACE PERIOD.
[373]
It is from bill date to payment due date.
[378]
No interest will be charged during grace period.
[380]
Total grace period will be 30 days of statement period plus 20 days of grace period.
[387]
So, interest free period will be between 20 to 50 days.
[392]
This bill cycle repeats itself.
[394]
Bill statement will be created for your expenses every month.
[401]
Payment needs to be done by due date which falls on next month.
[404]
This is called billing cycle.
[407]
Credit card has some important dates.
[410]
Let's see them.
[412]
First, Statement date.
[414]
Statement date is the date when the bill statement is created. It can be any day in a month.
[418]
For example, here we assume 8th day of a month as statement date.
[420]
Here, we consider 8th day of January and of February as statement date.
[425]
Let's take February 8th is the current statement date.
[430]
Previous statement date is January 8th.
[433]
Next, transaction date. It is the dates from 9th January to 8th February.
[441]
Whatever transactions made on these dates are counted in the current statement.
[446]
Next, Due date.
[448]
Due date falls on 20 days after current statement date. Here, it is 28th february.
[453]
It means that the bill amount generated on february 8th should be paid on or before february 28th.
[459]
The date you pay your bill is called payment date.
[465]
Next, let's see about PAYMENTS.
[471]
Here, let's take credit card balance zero in the beginning of the first month.
[477]
First expense is Rs.1000. So credit card balance will be updated as Rs.1000.
[482]
Then, second expense is Rs.500. Now, the credit card balance will be increased to Rs.1500.
[486]
Similarly, all the expenses in the period will be added to the credit card balance.
[493]
At the end of the period, bill statement will be created with the bill amount.
[498]
So, bill amount is equal to the current credit card balance of Rs.15,000.
[507]
This bill amount should be paid on or before payment due date.
[516]
If possible, total bill amount.
[517]
If not, you can do Minimum amount due.
[522]
Minimum amount due is generally 5% of total amount due.
[524]
Here, 5% of Rs.15,000 is Rs.750.
[528]
So, you can pay any amount from Rs.750 to Rs.15,000 against the bill statement.
[537]
Let's move to second month of credit card usage.
[543]
Expenses for month-2 starts with Rs.1500, then Rs.350, and Rs.150.
[547]
Before due date, payment for last month bill has been made here.
[553]
Let's take full payment of Rs.15,000 has been made.
[558]
Then, the credit card usage continues for the current month with some more expenses.
[563]
At the end of the period, the credit card balance is Rs.2500.
[566]
It means, Rs.2500 is the expenses in month-2.
[571]
So, the bill amount for month-2 is Rs.2500.
[575]
Payment should be made for this bill amount before next payment due date (on month-3).
[581]
Payment can be any amount from Rs.125 (min. amout due) to Rs.2500 (full amount).
[595]
Okay, here we paid full payment in month-2 against the bill amount created on month-1.
[602]
What if, only minimum amount due is paid against first month bill amount. Let's see.
[607]
It means, instead of Rs.15,000 only Rs.750 is paid.
[611]
This changes the credit card balance to Rs.16,750 instead of Rs.2500 in month-2.
[618]
New bill amount of month-2 is generated. Here, bill amount is not just Rs.16,750.
[625]
Interest will be levied because the full payment is not made.
[632]
Interest will be calculated daily for all expenses from month-1 to month-2.
[640]
There will be 18% tax (GST) on the interest amount.
[643]
Additionally, if there is any other fees. It will be included in the bill amount too.
[647]
And 18% tax will be charged on the fees amount as well.
[650]
Finally, the bill amount for month-2 will be sum of
[654]
credit card balance, interest amount, fees and 18% GST.
[659]
So, the bill amount is more than Rs.16,750.
[664]
From this point, the interest will be levied on all the expenses you make.
[672]
Interest will be charged for all new expenses until the point when you pay-off the full bill amount.
[681]
It is the catch in the credit card.
[684]
So, if you pay your bill in full payment, the interest will not be charged on your purchases.
[689]
If you fail to pay full payment, the interest will be charged for your purchases.
[697]
It may lead to debt trap.
[700]
Next, Bill statement.
[702]
As I mentioned earlier, bill statement is generated every month.
[705]
Bill statement is a document.
[707]
It includes four type of information.
[711]
Statement summary, Credit summary, Payment summary, and Dates.
[715]
Statement summary has information about previous balance,
[720]
expenses, payments and current balance.
[728]
In credit summary, it has information about credit limit,
[732]
available credit, cash limit, and available cash.
[736]
Available credit is the difference between the credit limit and credit card balance.
[745]
Similarly, available cash is the difference between cash limit and cash withdrawal.
[751]
Next, third category is payment summary.
[755]
It contains information about total amount due, and minimum amount due.
[761]
Next, Dates. Important dates like
[763]
statement date and payment due date.
[765]
These are the common information you find in a bill statement.
[768]
Additionally, transaction details and rewards details will be given in the statement.
[775]
These are the basic information on credit card.
[779]
Hope you got some idea about it.
[781]
Next episode, we will see credit card interest calculation.
[787]
After that, we will see hidden charges in the credit card.
[795]
Hope this video is helpful to you.
[797]
Please like, share, comment and subscribe.
[817]
Thanks for watching!
Most Recent Videos:
You can go back to the homepage right here: Homepage