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From the MD's Desk
A new perspective
have finally hit the National Capital Region and it has become greener and fresher everywhere. It is beautiful to see - one bout of rain and the landscape changes! Uncovering a perspective that was hidden - Much like a fresh light on any topic that changes perspective totally. In this business I get the opportunity to talk to many people across different levels and one thing that strikes me is the simplicity in the personal financial space that is welcomed by everyone. Simplicity and sincerity
of the information is what people seek and appreciate. So I thought of penning down in this issue a completely refreshed approach
to the most basics of the personal finance space.
It may all look the same to you – a plastic card with your name on it, but did you know that there exists a fundamental difference in the way you can use and reap the benefits of a credit card, a debit card and a charge card! I am sure you will find it interesting to gain a new perspective
on what’s the difference!!
In another section, our this month's expert tried to answer – ‘how much is enough?’
no, he didnt go the ‘art of living’ route, but sharing a perspective on credit and what are some of the good or avoidable uses of credit and how much amount would be ideal while applying to get an infusion of funds in the shorter term.
I hope you find the read interesting and refreshed !
Expect the best and capitalize on the monsoon sales, by the way do you have the right credit card ?
Until next time!
In this issue
- Credit, Charge and Debit Card - the difference
- Expert Speak by Mr. Pankaj Naraian
- Customer Testimonials
Credit Card, Charge Card, Debit Card…Is there a difference?
The answer is YES!
Not only in the way these cards are basically defined but also the terms of usage and repayment.
Lets see how !
allow you to purchase items up to your credit limit. You can repay them by the due date to avoid interest charges, or you can pay the minimum due amount (revolving credit) which will result in high interest charges over a period of time.
are similar to credit cards in that they allow you to pay for purchases up to your credit limit. Most charge cards do not have a predetermined credit limit. Charge cards require the balance to be paid back in a shorter period of time, usually within less than a month.
are tied to your own bank account from which you can simply withdraw money for each purchase per the available account balance. Therefore, you will get a debit card from your Bank where you have a personal or business savings account.
Credit cards have certain eligibility criteria. With income and age points, it also involves a credit check of the owner’s personal credit scores. Credit cards are available to consumers within a range of acceptable credit scores.
Charge cards generally require good to excellent personal credit scores to qualify.
On the other hand Debit cards don’t extend credit and therefore a credit check may not be required.
Costs and Repayment
Any of these cards may charge an annual fee. Charge cards, in particular, often carry higher annual fees.
Credit cards require the payment to be made by the due date as stated in the bill with an option to pay in full or revolve a certain percentage of the total amount at a high rate of interest. Charge cards require payment in full and if defaulted these attract hefty interest charges.
Debit cards deduct the amount of purchases out of the savings bank account directly therefore interest is not charged.
Credit cards often offer a variety of rewards which can include cash back, fuel, travel miles dining offers and more
Charge cards often offer premium rewards. American Express offers most charge cards and offer lucrative sign up bonuses and reward points.
Rewards on debit cards differ from bank to bank and generally are not considered as valuable as most credit card rewards.
Which one is Best for You?
Ultimately credit and charge cards carry greater protections and rewards than debit cards. Those who want to avoid an annual fee can look for offers provided by the banks that waive the annual fee on the basis of minimum spends required or can turn lifetime free card basis different offers from time to time.
Hope this article will help you understand the differences between credit cards, charge cards and debit cards so you can make an informed decision about which is best for you!!
Click here to apply for a credit card
At KonQuest, we match just the right card to your requirements and offer personalised service. Now serving more than 1000+ happy card holders!
Here we enclose some of our recent promotions that have recieved a lot of attention and ahem Likes!
While each one of us enjoys the value of Credit today, it is important to understand the distinction between a Good use of Credit and one that could in fact be construed as Bad.
Let me briefly explain what this means:
Good Uses of Credit
Building up of a good credit score. In order to build credit to prove creditworthiness to potential lenders, you need to use credit responsibly and consistently.
Using credit in an emergency. While it always is best to have a savings fund set aside for emergencies, credit can be used when an unexpected expense arises and you have no other option.
Consolidating debt. You can use a loan or a credit card to consolidate multiple debts into one so that your fi-nances are simplified.
Secure online shopping. A credit (or debit) card is now essential for online shopping.
Tracking family spending with credit cards. If each family member has his or her own credit with which to make purchases, you can figure out exactly where your money is going and how you might be able to cut back.
Using a loan to make a big, necessary purchase. If it was not for credit, most people would never be able to buy a house. Mortgages address this need.
Using a credit card for convenience. Especially when out of town or planning to make a large purchase, a credit card eliminates the need to carry around large sums of money.
Making a purchase that appreciates in value. A mortgage loan is considered a “good” debt because homes generally appreciate in value over time.
Earning rewards or cash back. You can get something in return for the purchases that you make, if put on a credit card with rewards.
Taking advantage of 0% APR. If you have a credit card debt that you would be able to pay off if not for that pesky interest, then consolidating your debt onto a new credit card with a low introductory APR might be just what you need. You can think of using the balance transfer approach in such cases.
Bad Uses of Credit
Using credit to extend income. Credit cards should be used for their convenience, ease of use, and relative safety – not as a way to make ends meet. If you are using the credit card to make everyday purchases that you may not be able to oth-erwise afford, then you are on the verge of debt trouble.
Making small, spur-of-the-moment purchas-es. If you are into the habit of using a credit card to make tiny purchases you will end up spending much more than you would if you paid with cash.
Gambling. Gambling on credit is a big no-no.
Starting own little collection of credit cards. Having too many accounts open and too much available credit is detrimental to the credit score, not to mention that unlimited access to credit cards can cause you to quickly charge up more than you can afford to pay.
Using a credit card for a major purchase. While you should not discount the tip above to turn a low-interest credit card into a loan, you should never put a major purchase – such as a house or a Car – on a traditional credit card.
Going on vacation. You really should not be going on a vacation unless you can pay for it. If you charges the cost of the vacation, then you will be paying for it for it, incurring prohibitive interest charges, over a long period of time. This is, in essence, the definition of a “bad debt”.
Using a credit card to pay for educa-tion. Student loans exist for a reason. If you charge tuition payments on a credit card, then again you will end up paying an enormous amount in the long run.
Friends, while this is just a short list I would urge that you use common sense as much as possible, to help make the right decision on the type of credit you should use.
We present to your our this month's top Delighted Customer testimonial.
We are happy to share with you a very warm message shared by Mr. Manchanda who approached us for education loan for her daughter who was leaving to pursue higher studies.
Mr Manchanda, New Delhi
“Had a wonderful experience with KonQuest and team that can only be summed as warm and personalised.
They not only helped in securing the education loan for my daughter in very tight timelines but also at every step kept reassuring me and my daughter that it will all be taken care of in a very personalised manner – that I found exceptional. It was a make or break point in time for my daughter’s career who proceeds to the US to pursue her MD and KonQuest really was able to help me with in-time release of the payment which was possible only due to their rich associations with the Bank – which I figured they really pushed for us :)
Thankyou & Kudos to the team KonQuest and all the very best to you for future!!”
And now a little bit about us...
KonQuest is a new age financial services distribution company empanelled with all major banks and NBFCs mainly for consumer financing and credit cards – the entire continuum of products include - Home Loans, Personal Loans, LAP, Education loans, Gold Loans, business loans. Our team has several years of experience in this domain who are happy to help our customers find the right solutions for their financing needs at the best possible rate of interests!!