Card Holder's Agreement

I was going through my last month's credit card statement. Normally, I see only a glance at the credit card statement. But, this time I stuck at the charges, I was not expecting any charges on my credit card statement. Then I start looking at the transaction details section and found membership fees on my statement. I got confused why this charge was there on my statement. Then I called customer care and inquired about the same. They explained everything to me and advised me to refer to my card Holder's Agreement, which I had signed at the time of signing up for the credit card.


Card Holder's Agreement/Most Important Terms & Conditions/Disclosure/Terms & Conditions are the commonly known terms of Card Holder's Agreement. When applying for a credit card, everyone has to agree to these terms and conditions of a credit card. This is the most unnoticeable document, which will be ignored by most credit card users due to its lengthy format, and many times we assume we know everything about the card we are signing up for.

Card Holder's Agreement has all important information related to credit card usage. The following  information is available in Card Holder's Agreement:

  • Payment Related Information,
  • Interest Related Information,
  • Fees Related Information,
  • Annual Percentage Rate,
  • Minimum Amount Due.
Payment Related Information:
This section contains information about different methods of making the payment towards your credit card's dues. Also, it will tell you how payment will be applied to your card's outstanding balances.


Interest Related Information:
This section explains how interest will be calculated on the balances. How you can save the interest amount on your card.


Fees Related Information:
This section explains the different types of fees which can be charged on your card, fee events, and how you can avoid them.



Annual Percentage Rate:
Every credit card provider has to let their customers know about this factor if there is any interest component involved in the cardholder's agreement. This factor, in general, explains how the interest will be calculated on your outstanding balance with the help of some examples.


Minimum Amount Due:
Minimum Amount Due is an amount that the credit card provider asks you to pay for a billing cycle to avoid any financial charges apart from interest. By paying this amount, customers can avoid being delinquent and maintain a healthy credit score. If a cardholder does not pay this amount, they will be charged the late fees followed by interest in the next statement. In the card holder's agreement, this is explained by referring to various scenarios


Apart from what I explained above, you will also find lots of other important information also on the Card Holder's Agreement i.e. Dispute Procedure, Interest-Free (Grace) Period, etc. I will be writing separately on these topics in later blogs. 

In a nutshell, this document which tends to be unnoticed most of the time has the most crucial information about your credit card usage. I would recommend everyone to at least refer to all this information thoroughly so that while using the credit card you don't make obvious mistakes and get charged unnecessarily.

Source of the Images: Standard Chartered, ICICI Card Statements.

Comments

  1. Mahendra11 September 2021 at 22:04

    Most important & complex nformation and you explained in a very clean and explanatory.

    Thank you,
    Regards
    M

    ReplyDelete
  2. Neeraj Singh12 September 2021 at 01:09

    This article is certainly going to spread awareness to read the T&Cs before signing cardholder agreement. Very informative. Thanks.

    ReplyDelete

Post a Comment

Popular posts from this blog

SMS Vs DMS

Image
I swipe my Credit Card at POS terminal, it took two days for reflecting the balance on my card account. On the same day I have performed a transaction using my Debit Card at ATM machine and the balance got impacted immediately. Why we have difference in both transaction processing? How does it work?  This happened due the different messaging system used by the associations. Most of the associations are using SMS and DMS both for Transaction processing. Single Message System and Dual Message System these are the two ways for processing the card payment transactions. In Dual Message System we first get authorization transaction from the association, on the approval of this transaction issuer can block card holders Open To Buy (OTB) only. At the end of processing day or the cut off time defined by association, issuer gets another message in form of clearing file. On the processing of this file issuer will impact the balances of card holder and release the blocked OTB. SMS Vs DMS If we...
Read more

Tips and Trick of Selecting Credit Card

Image
Tips and Tricks of Selecting Credit Card These days whenever you visit any big store, near to billing counter you may easily find a gentleman, who is seeking your time so he can explain you that the credit card offered by his company is better than your credit card. Most of us are using one or more Credit Cards these days. Did you select your Credit Card or they selected you? What should you consider when you want to apply for a credit card offered by different companies? Joining Fees: Most of the companies offer cards with no joining fees. What if you go through their agreement you will find they would be having the Annual Fees/Membership Fees in the following years. Interest Rate:  Whenever you asked a sales representative about the Interest Rate they will always tell you 3.25% only. They never tell you that it's monthly rate not annual rate. Statement Date: I don't think anyone of us really bothers about that what should be your Statement Date while applying for a credit ca...
Read more