When you pay with a credit card, the money doesn’t leave your account immediately. The money is advanced to you, making such a card a kind of loan.
Credit Card Providers
Visa, Mastercard, and American Express are the three major players operating in our country in the credit card sector. The first two work with partners such as banks to sell their credit cards. To obtain an American Express card, you must apply for it from the company itself.
Payment Timing and Repayment
A credit card is a payment card, but it works differently from a regular bank card or debit card. If you make a transaction with such a card, the money is immediately withdrawn from your checking account. If you pay for a purchase with a credit card, this is not the case. The money will be advanced to you for a certain period of time, and you will repay the amount at a later date. This allows you to spread out your purchases a little.
Reimbursement of the withdrawn amount can be done in two ways.
Monthly Statement Option
Either you receive a monthly statement, and you pay off all purchases for that period in one go. This is done on a fixed day in the month, for example, always the first of the month. The amount due will then be automatically debited from your bank account.
Make sure there is enough money in your checking account to make the repayment. As long as you pay back what you have withdrawn each month, you will not pay interest.
Repayment in Installments
For credit facilities up to ₹4,50,000, you must repay 1/18th of the reserves used each month.
According to Mastercard, the vast majority of credit cards in Belgium operate this way. A small minority are credit cards whose outstanding balance can be repaid in installments. Here’s how it works. Each month, you repay a fixed minimum amount. The amount is determined by law. For credit lines up to ₹4,50,000, you must repay 1/18 of the used reserves each month.
The balance can be repaid in installments. But you then pay high interest.
Credit Limit
The amount you can withdraw per month with your credit card is limited. All credit cards have a limit. The maximum amount varies from one credit card to another. It can range from ₹1,10,000 to ₹9,00,000.
Withdrawing Cash with a Credit Card
Yes, it’s possible. However, it’s not recommended because you’ll have to pay for each withdrawal. Please note that cash withdrawals are not deducted from your account immediately but along with your purchases.
