All You Need to Know About Credit Card Features

All You Need to Know About Credit Card Features

Credit cards are the most convenient tools to make payments- they allow you to make purchases now and pay for them at a later date. If handled well, credit cards help you build a good credit score and manage your budget better. But to maximize the benefits of your credit card, you must know about various credit card features.

Most Striking Credit Card Features

These days, several types of credit cards are available in the market and selecting a suitable one from them is challenging. These cards have different features, and their aims also vary. Here are the most common credit card features.

Grace Period or Interest-Free Period

The grace period is the stretch between the billing cycle’s end and the due date, during which you don’t have to pay the interest for your purchases. Remember, the grace period applies only to new purchases. But to avail of this benefit, you need to pay the total amount of your credit card bill every month on time. If you carry forward a part of the previous month’s balance, you can’t utilise this benefit.

Credit Limit

Credit limit is the maximum amount that you can spend on your card. It’s the credit card company that decides your credit limit when you apply for a card, and it’s based on your income, age, liabilities, credit score, credit history, type of credit card, etc.

Usually, credit card companies offer you a lower credit limit if you’re a first-time user. It’s because of the absence of a credit history to know how you manage your credit. Your credit limit may not remain the same for the entire period you use a credit card. Your card issuer may increase or reduce your credit limit depending on how you manage the card.

If you think your current credit limit is beyond your repayment capacity, you can request the issuer to reduce it to a comfortable level. It helps you to stay away from overspending.

Though all credit cards allow you to purchase up to your credit limit, certain types of cards let you make transactions beyond your credit limit. And the card issuer charges a fee if you exceed the credit limit, which is called an over-limit fee.

Over-limit Fee

Credit card companies charge an over-limit fee if your purchases exceed the credit limit in a billing cycle. And, frequent use of this credit card feature can hurt your credit score. It goes in this way. Every time you exceed your credit limit, your credit utilisation rate (CUR) also goes up. CUR is the ratio between the credit you’ve utilized and your credit limit. For instance, your credit limit is Rs. 25,000, and you made purchases of Rs. 5,000 using your credit card during a billing cycle. Here, your CUR is 20%.

Ideally, your CUR should remain under 30%. A CUR below 30% implies that you’re using your credit wisely, and as a result, your credit score will improve. On the other hand, every time you exceed the credit limit, the credit utilization rate goes beyond 100%, and your credit score dips slightly. If it continues for many months, the harm will be immense.

In India, an over-limit charge of 2.5% of the over-limit amount is prevalent, while a few issuers charge a much higher fee. So, it’s better to avoid cards that charge a higher over-limit fee.


Credit cards offer you rewards or bonuses for using credit cards for certain transactions like air tickets, payment for fuel, etc. You can accumulate these rewards and redeem them later to avail of discounts. Beware! Most credit cards that offer plenty of bonuses charge a higher interest rate. Hence, compare them before deciding.

EMI Conversion

The EMI facility of credit cards allows you to convert your big-ticket purchases into EMIs. It helps you to reduce the interest burden and pay off the debt easily over a period. Usually, this credit card feature is not applicable for older purchases. Hence, it’s better to convert your transaction into EMIs at the time of purchase.

Discounts and Promotional Offers

Credit cards offer exclusive deals and promotional offers to their customers. Thus you can save more by using credit cards. But it’s wise to avail of only those offers and discounts that you’re really in need of. Otherwise, soon you may be in a massive debt burden due to overspending.

Certain credit cards offer you privileges in dining, entertainment, etc. Hence, while finalising the card, check which all benefits you can enjoy.

Cash Advances

Using your credit card, you can withdraw money from ATMs. This process is similar to withdrawing money using a debit card, but cash advances fall under borrowing. Hence, most card issuers do not give a grace period for cash advances, but exceptions are there, like Bajaj Finserv RBL Bank SuperCard.

Try to use this credit card feature only during emergencies.

Loans Against Unutilised Credit Limit

If you have a strong credit history, you can avail of an instant personal loan in case of an emergency. The amount of the loan will depend upon the unutilised portion of your credit limit.

Reversal of Fraudulent Transactions

If you notice any fraudulent activities in your account, report them immediately to your credit card issuer to deactivate the card. A periodic check of your statement is a must to find these foul plays. Your card issuer will take necessary actions to settle the issue, and you may not be obliged to pay for the fraudulent transactions.


Before making the first transaction of your credit card, understand all the terms and conditions. Carefully review all features and fees before picking a card. Choose a credit card that offers you maximum benefits, like Bajaj Finserv RBL Bank SuperCard.

Read Morre: Can You Pay a Credit Card Bill With Another Credit Card?


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