Cases in which credit card does not offers minimum balance payment option

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Cases in which credit card does not offers minimum balance payment option
Credit cards that come in handy in case of emergency feature free credit period and also gives the option to pay-off some minimum balance amount due against the total outstanding debt. The free interest payment period is offered at the cost of higher interest rate in the range of 1.9%-3.7% on a monthly basis which can be as large as 44% per annum.

The regular feature that allows credit card holder to make minimum due amount payment against the total outstanding debt does not find provision in few of the cases. Some such instances are detailed here:

When the credit card issued to the resident India is set to expire in a given month, credit card issuer despite your instruction to pay off just the minimum amount due against the total debt deducts the total loan amount from the saving account. Generally, such a condition in case you don't apply for re-issuance of the card. However, in case of certain other circumstances and depending on your credit repayment behaviour, banks may take away the minimum amount due option from the credit card holder.

In a case when the resident credit card holder has the card issued against some deposit account, the card can be operated with some limitations. As when the card is about to expire and some amount stands outstanding on the account you can realize the proceeds of the deposit account only after settling the dues. And under circumstance when the debt remains unserviced by the cardholder till the due date, bank deducts the outstanding loan amount from the deposit account and pays the remaining back to you.

For credit card issued to non-resident Indians or NRIs, financial institutions generally do not offer the minimum due amount option and at the end of every cycle credit card holder is required to service the total debt. NRIs are not provided such a option mainly on the grounds that it might be difficult to trace the concerned NRI in case he leaves the country.

Also, credit card to such individuals are issued after careful scruitny in respect of their credit score and on the basis of the rapport that such individuals share with the bank.

Read more about: credit card, nris, loan
Story first published: Thursday, January 23, 2014, 16:15 [IST]
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