Essentially, there are only three cards, which are available, Visa, Master Card and Amex. Various participating banks like Citibank or Standard Chartered then issue these cards to end-users.

Visa and Master Card are the most popular cards in India and have an almost equal market share. Amex is relatively new in India and issues its cards only through The American Express Bank.

To get your own credit card, you need to get in touch with an issuing bank like Citibank, Standard Chartered or Bank of Baroda and fill up the application form. You will then need to submit the application form along with documents that verify your income, age and place of stay. After a short credit appraisal, the bank will send you your card by mail.

You need a salary of at least Rs. 75,000 per annum for an ordinary card and Rs. 1,75,000 per annum for a gold card.

When your application form for a credit card is accepted, you will need to pay a joining or membership fee, which varies from bank to bank and on the type of card applied for. Typically joining fees vary between Rs 100 and Rs 1,000.

Every year, you will also need to pay an annual fee to continue your membership to the card. The annual fees are payable in advance (at the beginning of each year) and could be as high as Rs 2,000 for a Standard Chartered Gold card or as low as Rs 400 for a Cancard from Canara Bank.

You will not need to pay cash for the fees. The issuing banks automatically bill these to your credit card in the first monthly billing statement, and hereafter, every year.

A credit card allows you to pay for service or product over a period of time. The first 45 to 50 days of credit (calculated from the day of billing and not from date of purchase) come interest free. You can chose to pay your entire dues at one go, or staggered them after paying the minimum amount due every month.

A charge card works on similar lines as the credit card with one difference. With a charge card you have to pay the entire dues within the credit period. You cannot carry over any balances like a credit card.

A debit card enables you to access your bank deposits for payment. When you make any purchases using a debit card, then your bank account is automatically and instantaneously depleted to the extent of the purchase amount.

Gold, Silver and Classic/Executive are the terms used by issuing banks to differentiate between the levels of services offered on each. Naturally the gold card offers better features, higher insurance covers and more facilities. There is also an element of esteem associate with gold cards. However, all these features do not come cheap. Gold cards have the highest fees and service charges associated with them.

A Global Card enables you to use your credit card when you are overseas. You can spend in dollars or any other foreign currency and settle the dues in your local currency.

Your credit limit is based on the basic travel quota (BTQ) entitlement, and if this more than your assessed credit limit, you could buy traveler’s cheques.

The PIN or the Personal Identification Number is unique to every card and isa combination of numbers. The PIN serves as a key, which allows you to avail certain services like cash withdrawal from automatic teller machines. This number is very important and must be stored carefully. Most credit card issuing banks instruct their clients to write the PIN in a very safe place or better still, to simply memorise the digits.

In the event that you lose the PIN or have forgotten it, you must get in touch with the bank immediately. The bank will replace your credit card and issue a new PIN. Though the replacement process happens very quickly, it comes at a cost, and is billed to the user in his next credit bill.

Credit cards are relatively safer than carrying cash. You can spend anywhere, any time. Now days you can also issue cheques against your card limit and order drafts over the phone. Credit card enables you to other benefit like discount at shops and restaurants airline tickets and insurance cover. Most credit cards also offer personal accident cover. You get interest free money for 45 to 50 days. A global card assures you of spending in any currency and settling dues in home currency.

In the event of losing your credit card, you must inform the bank immediately. The bank ten deactivates your card to prevent any fraud. You are protected from settling any expenses on your card the moment you inform the bank.

Before you report the loss of your card, you will have to pay for all the purchases fraudulently made on your card. After reporting the loss, your liability is mostly restricted to Rs. 1,000. You may also have to pay for the reporting of the loss in the lost card list. Besides this, you will be expected to pay for the issue of a replacement card.

Check your name on the card, note down the card number and sign below the magnetic strip. Never disclose your card number or leave your cards unsigned. It can be abused.

Never treat your card casually and always keep it safely in your wallet. Always keep the copy of signed charge slips when you spend on your card. This will help you tally what you spent with what you get billed for.

To apply for a credit card, you need:

• To be at least 21 years of age and not more than 65 years.
• A regular and steady source of income

Credit card companies (or issuing banks, as they are known) have a requirement of a minimum income level, which serves as the starting point while applying for a card. This requirement varies from bank to bank and could vary between Rs 60,000 per annum to Rs 150,000 per annum depending upon your risk profile and the type of card you choose. Typically, banks issuing credit cards need to be sure whether or not you will be able to repay the expenses incurred through your credit card.

A useful feature, which is now standard for credit cards is an insurance cover, both personal and on the articles purchased on the credit card.

The insurance cover provided generally from bank to bank and is largely determined by the type of credit card owned, whether gold, silver or executive. Typically, Gold cards carry the highest insurance cover for its members.

Some of the insurance covers provided by credit card companies are:

• Life insurance
• Insurance for spouse/supplementary card holder
• Baggage Cover
• Purchase protection

Every credit card holder is insured for a certain sum of money, which is paid upon the death of the individual. The insurance cover varies between bank to bank and depends upon the type of card owned. For example, each member of ANZ Grindlays Gold Card is insured for a sum of Rs 500,000 (in case of a general accident) and for 1,000,000 (in case of an air accident).

This feature provides an insurance cover for one’s spouse or for the holder of a supplementary or add-on) card. The insurance cover can very between Rs 50,000 to Rs 500,000 depending on the issuing bank and the type of card owned. This feature however is not standard on all credit cards and users may well check this out before making their decisions on the card they would like to own.

A feature largely available on Gold cards and International Credit cards, the baggage cover provides the safety of insurance in the event of losing one’s baggage while travelling. This feature is not standard on every credit card and frequent travellers may like to check out whether this feature is available before choosing their credit cards.

The purchase protection feature automatically insures all items bought on the credit card from damage or loss due to fire or theft up to a certain sum of money.

The credit shield is a feature allowed by credit card banks which provides a waiver of payments of outstandings on your card up to a certain limit (Rs 20,000 in the case of Hon Kong Bank) in the event of an accidental death.

An add-on card is usually for your dependents - spouse, parents or children. Any additional cards under this head come at a fee, which varies between Rs 125 to Rs 1,000. All expenses on the card are billed to you. A disadvantage is that your credit limit gets divided between the main card and add-on cards since an add-on card does not get additional credit limit.

No. Herein lies the beauty of owning a credit card. Credit card issuing banks offer you an interest-free period of 40-50 days, after which the payment has to be made on purchases made against your credit card.

You also have the choice of carry forwarding your out standings by the payment of a ‘minimum due amount’ (generally 5% of the outstanding).

If you pay off the entire amount within the interest-free period, then no charges are due. However if you choose to avail of the credit facility, then a credit charge is levied which generally varies between 2.5% to 3%.

It should be noted that though the notional interest free period is for 40-50 days, billing is done monthly, so the actual interest free period could vary depending on whether the purchase was made at the start or the end of the billing period.

The entrance fee is payable on acceptance of your application for a new credit card. This fee varies between Rs 100 to Rs 400 depending upon the issuing bank and the type of card requested. More often than not, this fee is waived.

The annual fee is payable in advance, at the start of every year and could be as low as Rs 400 for a Cancard or could go as high as Rs 1,500 for an HSBC Gold Card. The annual fee is not paid for in cash, but is billed into the first billing statement received by the card member.

The Supplementary card/add-on card fee is the fee payable per additional card that a member may request for his close family member like father, brother, sister or spouse. This fee varies between Rs 125 to Rs 1,000.

Cash advance (withdrawal) fees are payable when you withdraw cash from an automatic teller machine using your credit card. Cash advance fees are very high and are mostly in the range of 2.5% per transaction of fixed at a minimum of Rs 50 or 100. This facility should be used prudently, as the interest rate is very high, usually around 38%.

In the event that you lose your credit card or it is stolen, then you must inform the bank immediately. The bank then deactivates your credit card to prevent any fraud. The lost card liability fee is payable on the expenses incurred during the period between the loss of your card and your having reported it to the bank. The lost liability fee is restricted to a maximum sum of Rs 1,000 in the case of most credit cards issuing banks.

Late payment fees, as the term indicates are payable in the event of any delay in repayment of the out standings on your credit card after the stipulated ‘interest-free period’. These charges are very steep and card members are well advised to pay off at least the minimum amount due on out standings every month.