Applying for a Credit Card

Credit card providers will do everything in their power to hook You into getting a credit card. Many attach a free gift or special offer and while that t-shirt of frisbee might look nice now, it isn’t worth the headache that a credit card will ultimately bring you. The most important thing to consider when applying for a card is the terms and conditions, not the free stuff.

Know your credit limits.
Usually credit limits are low when you get you first card. This is a good thing. It keeps your debt manageable, and allows you to start to build your credit score at an early age. Whatever you do, don’t go over your limit or you will pay some hefty penalties. Keep track of your spending.

Remember, promotional rates are temporary.
Just about every credit card offers a promotional rate for a fixed period of time to attract new customers. Do your homework and find out exactly how long, and then make sure you know what the APR will be set at after the promotional rate has expired.

Watch out for penalties and unnecessary fees.
The biggest pitfall with a credit card other than spending too much, is to have unnecessary fees added onto to your balance. These fees are most commonly associated with late or missed payments. In most cases, any missed payment results in a penalty plus a resetting of the APR to the highest possible rate.

My last piece of advice is to keep one card only. The more you have, the more likely you are to use them and confuse them. Keep it simple and good luck.

Read this if you use credit cards

As instances of credit and debit card thefts is on a rise, users need to be aware of the fact that if unreported, the liability on the amount of financial loss on their credit cards would rest on them. However, in the event of the death of the customer and any misuse of the card after that, like what happened in Delhi recently, where two women allegedly lost their lives at the hands of robbers, banks say that they would not go to the customer's family to recover the amount.

"As a gesture we won't go for recovery to the individuals family and I think that no bank will seek recovery in such case," said an official from a private bank on conditions of anonymity. However, banks set customers liable for any loss on card prior to discovery of card loss.

There are however means where the customer can transfer the risk of any financial loss on the credit card. There are insurance covers available with certain cards, which cover the pre discovery fraud loss on credit cards.

Citibank and HSBC offer the pre discovery fraud loss on their cards in partnership with CPP Assistance Services. It covers losses upto 24 hours prior to the notification of card loss.

These are available on select cards and also the cover is only upto several hours before the reporting of card loss," said Harsh Roongta, CEO, Apnaloan.com.

This means that if the cover is upto 12 hours prior to reporting of card loss then if the card is lost at 7 AM in the morning, and he reports the card loss at 9 PM the same day then any financial loss between 9 AM and 9 PM will be covered. Reserve Bank of India has been laying emphasis on banks to provide the pre-discovery fraud loss cover on their cards, said the bank official.

Also, RBI has asked the banks to put in place a system where the system will ask for one additional information that is not available on the card to validate the transaction. "This will make the online credit card transaction secure going forward," said Roongta.

Read this if you use credit cards

As instances of credit and debit card thefts is on a rise, users need to be aware of the fact that if unreported, the liability on the amount of financial loss on their credit cards would rest on them. However, in the event of the death of the customer and any misuse of the card after that, like what happened in Delhi recently, where two women allegedly lost their lives at the hands of robbers, banks say that they would not go to the customer's family to recover the amount.

"As a gesture we won't go for recovery to the individuals family and I think that no bank will seek recovery in such case," said an official from a private bank on conditions of anonymity. However, banks set customers liable for any loss on card prior to discovery of card loss.

There are however means where the customer can transfer the risk of any financial loss on the credit card. There are insurance covers available with certain cards, which cover the pre discovery fraud loss on credit cards.

Citibank and HSBC offer the pre discovery fraud loss on their cards in partnership with CPP Assistance Services. It covers losses upto 24 hours prior to the notification of card loss.

These are available on select cards and also the cover is only upto several hours before the reporting of card loss," said Harsh Roongta, CEO, Apnaloan.com.

This means that if the cover is upto 12 hours prior to reporting of card loss then if the card is lost at 7 AM in the morning, and he reports the card loss at 9 PM the same day then any financial loss between 9 AM and 9 PM will be covered. Reserve Bank of India has been laying emphasis on banks to provide the pre-discovery fraud loss cover on their cards, said the bank official.

Also, RBI has asked the banks to put in place a system where the system will ask for one additional information that is not available on the card to validate the transaction. "This will make the online credit card transaction secure going forward," said Roongta.