Tagged: Credit Card

POW :: Now, pay your rent through credit card; there are benefits too

A London based fintech company, RedGirraffe, is offering a facility to pay rent through credit card using its online platform “RentPay”.
Renu Yadav | New Delhi, June 15, 2017 | Business Today

POW

Rent is generally one of the biggest component of the monthly expenditure that you make. Now, you can not only pay your rent through credit card but can also earn reward points on the amount paid. A London based fintech company, RedGirraffe, is offering a facility to pay rent through credit card using its online platform “RentPay”. For this, it has tied up with various banks including State Bank of India, ICICI Bank, HDFC Bank, IndusInd Bank, Axis Bank and Kotak Mahindra Bank. So, if you have a credit card from one of the banks that have collaborated with RedGirraffe, you can use it to pay rent.

How you can do it
To enroll for this facility you have to visit the website http://www.redgirraffe.com and create a RG Property ID by filling up the details of the rental property and attaching the rental agreement. The tenant will mention the bank account details of the landlord in the form. After submitting the form, a mail will be sent to the tenant’s mail id for giving standing instructions to the bank. After this one time registration, your monthly rent will be deducted automatically on a predetermined date.

“Bank and RedGirraffe.com have strong processes of inbuilt compliance and other tenant verification/reference checks. All the bank accounts remain automatically linked to Aadhaar and PAN details. In cases where the accounts are not linked, such customers are not allowed to transact via RentPay anyway. Apart from this level 1 verification mode, there are another 17 point checks (carried out between the bank and RedGirraffe.com) during each tenant onboarding. The verification happens over a period of 50 working days,” said Manoj Nair, Founder and CEO, RedGirafffe.com.

Why it is beneficial
The advantages of using this platform is you get 45-60 days of credit as your rent remains in your savings bank account and you earn returns on the amount. Also, if you use credit card, you can avail reward points depending on the offer that your bank is giving. “Since rent payments are typically large transactions, such spends enable customers to earn significant reward points. These points can be redeemed against the banks catalogue of over 200 options including products, gift vouchers, e-vouchers and air miles. Cardholders can even redeem points to pay their outstanding on the card,” adds Vijay Jasuja, CEO, SBI Cards. Apart from this it will also help the tenant build a good CIBIL score which can help him or her get loans at relatively better rates compared to a person with no or bad CIBIL score.

What are the charges?
A transaction fees of 0.39 per cent with a minimum of Rs 39 per transaction will be charged from the credit card holders of ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank and IndusInd Bank. Apart from this a service tax will be levied on it. So, for every Rs 10,000 rent paid the gross transaction fees including service tax comes to around Rs 45. However, in case of SBI Cards, an additional banking transaction charge of 1.75 per cent plus taxes shall be charged extra by the bank.

Source: https://goo.gl/3bVFWC

ATM :: What does your credit score say about you?

Your credit score indicates your financial health, thereby determining your creditworthiness. Credit scores are provided by institutions such as CIBIL, Experian etc., among which, CIBIL is the most popularly used mechanism for lending. Credit bureaus assign a score to you on the basis of evaluation of your loan repayment habits and credit card history.
By: Adhil Shetty | Published: March 24, 2017 12:46 PM | NDTV Profit

ATM

Your credit score indicates your financial health, thereby determining your creditworthiness. Credit scores are provided by institutions such as CIBIL, Experian etc., among which, CIBIL is the most popularly used mechanism for lending. Credit bureaus assign a score to you on the basis of evaluation of your loan repayment habits and credit card history.

How to read your credit score
The credit score is typically represented in a triple-digit number ranging between 300 and 900 points. While higher points reflect financial discipline and a good credit standing, lower credit scores reflect poor repayment habits—which, in turn, could reveal poor money management skills. Banks and lending institutions usually prefer a credit score of 750 and above for issuing a loan or credit card. A high credit score could help you get loans at the best interest rates available. For people who do not have a credit history, the credit score reflects to be -1.

What does your credit score say about you?
Let’s look at the various aspects of your financial life that your credit score throws light on.

Timeliness: A crucial component in computing your credit score is timeliness in repaying loans and credit card bills. CIBIL, for instance, gives timely repayment about 35% weightage in calculation of credit scores. If you pay your bills on time, you are considered to be disciplined and committed towards the repayment of your dues. While a one-off case of delay may be ignored by the credit card company, repeated delays would earn negative scores.

Trustworthiness: Banks and financial institutions consider you to be an eligible borrower if your credit score is robust, as it reflects trustworthiness. A poor score indicates increased dependence on credit and lack of timeliness in repayment, which after a point may reflect lack of integrity and therefore intent to pay back.

Credit hungriness: A credit report also indicates your dependence on credit. This is assessed in terms of your credit utilization ratio, which refers to the percentage of credit you use from what’s available. A high credit utilization ratio shows credit hungriness irrespective of when you repay it.

What if you don’t have a credit score?
It may be great to never have to take a loan. But from the point of view of developing a credit history, it’s important to have some form of credit, be it loans, credit cards, or EMI store purchases.

If you have never availed any form of credit, the credit bureaus and banks wouldn’t have a credit history to analyse you with. This could make things tricky for you if you approach a bank for loan in future.

So, how do you show a history of timely repayment? You can start with taking a secured loan or credit card and maintain a record of timely repayment to be on the good books of the banks.
(The writer is CEO, BankBazaar.com)

Source : https://goo.gl/RiZa4E

ATM :: Don’t worry about your low credit score

Adhil Shetty | Dec 19, 2016 | Deccan Herald

ATM
If you’re applying for a loan or a credit card, your lender would look into your credit history. A CIBIL score of 750 or more is considered desirable by most lenders. If you’ve been prompt in repaying your credit card bills and other loans, you should have a sturdy score.

But every now and then, people get a rude shock with their CIBIL score which prevents them from getting a loan product of their choosing. This means that their loan application may get rejected, or they may be offered a loan with a high interest rate.

Your CIBIL score could be low for broadly two reasons — Data in your CIBIL report is incorrect, and that you have defaulted on a loan or have been irregular with your repayments.

The first step towards ascertaining the details of your CIBIL report is to get a copy of it. You can do this for a fee of Rs 550 from the CIBIL website. Your report will be generated instantly and its details will be shared with you on your email.

Now, let’s dive deeper into these two issues.

Incorrect reporting of personal and credit history
*Check personal details: Your CIBIL report carries your personal details such as name, PAN number, contact information, employer’s address, employer information such as salary and occupation.

Next, it carries details of every credit card account or loan account you’ve opened with regulated entities such as banks and NBFCs. Any discrepancy in this data needs to be checked and challenged. Ascertain that the details in your report pertain to you and your own credit history. If you’ve mistakenly been assigned someone else’s credit history — especially an adverse credit history — your credit score would suffer.

*Check repayment details: Next in your report, go through the details of all the borrowing accounts you’ve opened: Credit cards, personal loans, home loans, car loans, etc. You also need to check the monthly repayment details of all these accounts. The CIBIL report would reflect any delays in repayments (as ‘days past due’), defaults, settlements, write-offs, value of collaterals offered, etc. Ascertain that all the details are correct and that these accounts actually belong to you. This data is reported to CIBIL by your lender. If any detail has been reported in a way that adversely impacts your borrowing history, your credit score would suffer.

*Raise a complaint: CIBIL allows you to challenge incorrect reporting through its website. You can also contact them through post. When you access the online copy of your report, you can go over your personal and financial details. Any details that you want to be corrected need to be reported to CIBIL, which will then contact your lending institution for amends. This process may take up to 30-45 days. If the lender accepts the corrections, they will reflect in your report. If the lender refuses to accept your corrections, you will have to get in touch with them directly. This is because CIBIL prepares your report from information received from your lender. Therefore, CIBIL cannot directly change the contents of your report.

Defaults, Delays In Repayments, Credit-Hungriness
If you have neglected repaying your loans, it would hurt your credit score hard. Let’s take a quick look at your options to address this problem:

*Repay loan balances on time: Whether you have loans or credit card dues, always aim to settle them as per your repayment plan. If there are difficulties in repayment, always keep your lender in the loop so that the lending terms may be made easier. With credit cards, always pay the full due amount rather than the minimum amount.

*Don’t be credit-hungry: Don’t apply for too many loans or credit cards, especially within a short time. With application, the lender will check your credit history. Too many queries into your credit history would reduce your credit score since you will be seen as a credit-hungry person. Also, having too many loans at the same time means you will have to manage several EMIs every month, which would adversely impact your liquidity and could lead to default.

*Increase credit limit on card: Try and spend no more than 20% of your credit card limit. For example, if your monthly spending limit is Rs 1,00,000, restrict your spending to Rs 20,000. It means that your credit utilisation ratio (CUR) is 20%, which is ideal. A frequently high CUR would portray you as being in constant need of short-term credit.

Asking your credit card provider to increase your spending limit, or having multiple credit cards, can help reduce your CUR. For example, your increased spending limit could be Rs 2,00,000, whereas your monthly spending is Rs 20,000, thus bringing your CUR to 10%. Also, if you have multiple credit cards, you could divide your spending between them, thus maintaining an optimum CUR on all cards rather than increasing the CUR on a single card.

*Don’t settle: If you’ve defaulted on your payments, your lender may offer you an option to ‘settle’ your loan. This means paying a percent of your principal and interest due, and considering the loan account closed. Taking this option would reflect in your CIBIL history and it would adversely impact your credit score. Any lenders you approach would see that you were unable to repay your loan. Therefore, do not take the settlement option if you can settle loans in full.

*Repay a mix of credit: You should have a history of repaying a mix of short-term or unsecured credit such as credit card balances and long-term or secured credit such as home loan. The timely repayment of a mix of credit instruments would reflect well on your credit history.

(The writer is CEO at http://www.BankBazaar.com)

Source: https://goo.gl/HlhFXw

ATM :: EMI-free loans: Best means to repay credit card debt

By Satyam Kumar – LoanTap | Sep 27, 2016, 04.34 PM | Source: Moneycontrol.com
Also known as credit card takeover loan, this can help you get rid of credit card debt.

ATM

One of the easiest ways we can choose to build a healthy financial future is to get a credit card and use it wisely and responsibly. Let’s say, for most people, a credit card offers their first opportunity to start building a credit history. While many credit card users pay off their credit bills in full every month, there are others who take the route of making minimum payments on their credit card bills and become too comfortable with the idea. But as easy as it may seem, it is just a delusion that making minimum payments is enough to prevent late fees and interest charges. Even banks and financial institutions are not likely to specify information on the damage minimum payments might cause in the long run. There are numerous consequences of failing to pay off your charges in full every month. The lack of awareness is causing credit card holders to lose money that they could easily save. Still not convinced? Here is your chance to learn more about minimum payments, how they might affect your financial health and the best possible solution available to you to undo the damage.

The minimum payment is a fraction of the total outstanding amount that is due. So, for instance, if the outstanding amount due on your credit card for a particular month is Rs 25,000, then the minimum payment would be Rs. 1,000. It is a common misconception among many people that banks will not charge interest on their credit card as long as they are making the minimum payment. Unfortunately this is not true. The only benefit that can be derived by making the minimum payment is that one will not have to pay late fees. Also, this will keep credit score in good shape but there would still be no respite from paying steep interest.

Relying on making minimum payments for an extended period can result in a huge debt that may even exceed one’s credit limit. This is because the higher the pending amount, the higher will be the interest amount. This might pose to be a challenging financial problem. This is when a credit card takeover (CCT) loan comes to the rescue. Many consumers aren’t aware of the benefits of a CCT loan and how it might help them in saving and maintaining their credit score.

Here are a few ways it can take care of a huge credit card debt:
1. A CCT loan offers low interest rates compared to credit card interest rates. The annual rate of interest is usually 18% lower than any credit card interest rate. This dramatically reduces your interest burden.
2. It is convenient for those who are financially not ready to pay the full outstanding amount that they have run up on their credit cards. One can only pay the interest amount initially and wait until they are in a better financial position to pay off the principal on quarterly or annually, which is easily affordable.
3. A CCT Loan can help in protecting your credit score. How? We all know that delayed credit card payments can have a negative impact on one’s credit score, which eventually lowers any chances of loan approvals later in life. In such cases, taking an EMI-free loan is the best way to save the CIBIL score.
4. A CCT loan can provide the opportunity to avoid late fees and penalties as the loan can be sanctioned within a small span of time. This eventually helps in saving up a lot of money in the long run.

People nowadays opt for flexibility in everything, whether it is their job or education. Loans like CCT or EMI Free is helping those sections of people by offering flexible options to repay credit card debt. Although one can use it for numerous purposes like buying a house, paying for education fees, or even for financing one’s marriage, its low interest rate makes it a viable option to pay off outstanding credit card debt that may be creeping up on your savings without your realizing its deleterious impact.

Source: https://goo.gl/iuG5Ax

ATM :: How to increase your chances of getting a higher credit limit on your credit card

A credit card is often looked at as a debt trap and you often hear words of caution about how its reckless use can land you in trouble to say the least. While the above may be true, most people do not see the other side of the coin when it comes to credit card usage. Your credit card, when used judiciously and smartly can actually help you increase your CIBIL score.
By: CreditVidya | July 25, 2016 8:00 PM | Financial Express

ATM

A credit card is often looked at as a debt trap and you often hear words of caution about how its reckless use can land you in trouble to say the least. While the above may be true, most people do not see the other side of the coin when it comes to credit card usage. Your credit card, when used judiciously and smartly can actually help you increase your CIBIL score.

There are many factors that influence one’s CIBIL score and one of them is a low credit utilisation. Credit utilisation is the total amount of credit you spend as against the total amount made available to you. Of course you can keep your credit utilisation low by spending low amounts on your credit card and never exceeding 30-40% of your total credit limit, but the other way to do it is by increasing your credit limit on your card.

By increasing your credit limit you can definitely give your CIBIL score a boost and thus open up doors of lenders when you are in need of credit. If you are wondering by now what exactly is to be done in order to increase your credit limit on your card, we are here to tell you just that.

Follow the golden rules of credit usage
To have to credit limit increased automatically, you need to prove to your credit card issuer that you are a trustworthy customer. The only way to do so is to follow the golden rules of credit card usage i.e make timely repayments, spend small amounts on your card, keep your credit utilisation and most important of all repay within the billing cycle. If you simply follow these basic rules, chances are that the card issuer or your bank will automatically increase your credit limit from time to time.

Make the call to your bank
If you have been doing everything right and have not seen an increase in your credit limit in the last six months, make the call your card issuer or bank yourself and make the request for an increase in your credit limit. Make sure you bring your good credit behaviour to their notice. Chances are, they may not have noted it yet or it’s just a case of negligence that you card limit has not been enhanced yet. In such cases, a polite reminder will not hurt!

Check your CIBIL report
If you make the call and your request gets denied on account of a poor CIBIL score, it is very likely that you will be taken aback because you thought you were indeed doing everything right as far as your credit usage is concerned. The problem may not be your credit conduct but a reporting error on your CIBIL report.

Sometimes errors and discrepancies creep in into CIBIL reports given the huge amount of data that lenders and credit bureaus handle. This is the reason why periodic checks of your CIBIL report is so important. If your bank denies you an increase in your credit limit, go back to your CIBIL report and check for errors. In case you spot any, make sure you raise a CIBIL dispute right away and wait for the rectifications to reflect on your report before you make a request to your card issuer again.

Do it for the right reasons
As we have pointed out so far, increasing your credit limit on your card has its advantages. However, make sure you are taking this step for the right reasons, such as dealing with a work related expense or a medical condition that will be reimbursed later, by your company or your insurer. But for those who are already in debt, or struggling to meet expenses increasing one’s credit limit may be the equivalent of stepping on a live wire, so make sure you are tread with caution!

Source : http://goo.gl/xcJpZQ

ATM :: Why Paying Credit Card Bills On Time May Not Be Enough

Creditvidya.com | Last Updated: June 13, 2016 10:38 (IST) | NDTV Profit

ATM

Credit utilisation is the ratio between the credit card spending and the sanctioned limit for the card. This is calculated cumulatively as well as individually which means that it is calculated for each card that one might have and also for all the cards put together. Thus, the overall spending on your card versus the total sanctioned limit is the cumulative credit utilisation.

Why is this ratio important? This ratio is important because after the repayment history this is the biggest contributor that makes or breaks the CIBIL score of an individual.

How does it make a difference if the credit utilisation is high or low? High credit utilisation is indicative of being credit hungry and also poor debt management, both indicate risky borrowing behaviour which makes the CIBIL score low. Then does it mean that zero credit utilisation is good?

No. While a high credit utilisation ratio is definitely not good for the CIBIL rating a nil one is also not good either.

Smart ways to manage credit utilisation ratio

Reduce expenditure: Well, to be honest it is not the smartest way but definitely the most obvious and the simplest way. Yet this is something that might not be the easiest thing to do. If expenditure on credit card is high because of unplanned and impulsive buying then yes you could try to reduce the spending.

Get a bigger credit limit: Either one could decrease the numerator (spending) or increase the denominator (limit) to reduce the ratio. Getting a bigger limit is one of the options. Often for cards that were issued a few years back, card holders forget to revise the sanctioned credit limit even though they are eligible for it. Thus one could check with the card company and find out if they are eligible for a higher limit. If the eligibility allows then one could get a bigger limit sanctioned for their existing card.

Opt for an additional card: If a higher limit is not possible due to the rules by the credit card issuer or you already having a high limit, then one could explore the option of getting an additional card. An additional card will raise the overall available credit limit thus making it possible for you to control a high credit utilisation ratio. However this option will work only if the expenditure is spread smartly over all cards and if one easily manages paying the dues on all cards.

Distribute expenditure smartly between cards: An additional card will not work if the expenditure is not distributed judiciously over all cards. It also makes sense to time the spending depending on the billing cycle and due date and charge it to the appropriate card accordingly. If the credit utilisation ratio is low overall but is too high for one card then also it is not a good indicator for the credit score.

Try paying mid-cycle once a while: If in one billing cycle due to some festivities or unforeseen circumstances there is very high spending on the credit card, then one could consider paying before the actual due date to keep the credit utilisation in check. Paying mid-cycle some amount will ensure that the ratio does not become too high.

Disclaimer: All information in this article has been provided by Creditvidya.com and NDTV Profit is not responsible for the accuracy and completeness of the same.

Source : http://goo.gl/Cxof7c

ATM :: Beware of these hidden charges on your home loan

HARSH ROONGTA | Tue, 29 Mar 2016-09:22am | dna
Shrinking interest rate margins have made several lenders to insert hidden charges to increase their margins by stealth.

ATM

The home loan industry has come a long way from the time when the only charges that you had to watch out for were the processing charges taken under various heads and pre-payment charges. Regulation has ensured that there are no pre-payment charges and competition has ensured that there is a greater degree of transparency around the processing fee, legal fee, valuation fee or technical charges. Competition has also ensured that there is hardly any difference in the interest rates charged by various home loan lenders. Unfortunately, the shrinking interest rate margins have made several lenders to insert hidden charges to increase this margin by stealth.

Here is a list of these charges:

Charge interest on the loan which is disbursed late – This is a common practice. The lender prepares a cheque, but it is not to be handed over till certain documents are received from the borrower and/or the seller. These documents normally may take a few days to a few weeks, and meanwhile, the interest meter is ticking for the borrower. This is not as small as it looks. On a loan of Rs 1 crore, the interest @9.50% works out to Rs 2,600 daily.

The cost of a 10-day delay in handing over the cheque (which is pretty common) means an additional cost of Rs 26,000 or 0.26% of the loan amount. You should negotiate with the lender that you will only pay interest from the day the cheque is actually handed over to the seller and not from the date mentioned on the cheque.

Advancing the EMI payment date – The EMI amount is calculated assuming that the payment will be made at the end of 30 days from the date of disbursement. If this EMI is paid earlier than 30 days, the cost becomes much higher than the stated cost. An example will illustrate this. If the disbursement is made on February 15, 2016, and the EMI is payable on the first of every month then typically you should pay interest equivalent to 15 days’ interest (from February 15, 2016, to March 1, 2016) and the EMI should start from April 1, 2016, only. However, most lenders will start off the EMI from March 1, 201, and still charge you for a full month’s interest. Again, the difference is not as small as it sounds. 15 days’ extra interest for a Rs 1 crore loan @9.50% works out to Rs 39,000 or 0.39% of the loan amount. Again, you can negotiate with the lender to make sure that this additional hidden interest is not charged to you. Unlike the first point which is easily understood, this point is technical and the lender can run loops through the borrower while explaining how the EMI is calculated.

Forcing borrowers to buy expensive insurance products – Lenders have tied up with life and general insurance companies to provide life, disability and property insurance to borrowers and they force you to take these policies. The lenders earn fat commissions on the sale of these insurance policies and even though officially not permitted, they force the borrowers to sign up for these policies. It is a good practise to have such type of insurance policies when you take a loan, but the problem is that the policies being hawked by the lenders are hugely overpriced, reflecting the captive base of borrowers and the fat commissions for the lender inbuilt in such policies. To avoid having to pay for these overpriced policies, you can negotiate with the lender that you will buy these policies on your own. In all probability, you will get the exact same policy from the same insurance provider as what the lender is pushing at a fraction of the cost that the lender will charge.

Forcing borrowers to take a credit card or some other add-on products – In most cases this is offered for free while not stating that it is free only for the first year and would have an annual fee every year after that. You can easily negotiate your way out of this one.

Whilst these are the “extra” charges that lenders take from borrowers, there is a charge that they are unfairly accused of taking. For example, in Maharashtra, you have to pay a stamp duty of 0.20% of the loan amount on the document creating the security in favour of the lender. It is obvious that this charge will be recovered from the borrower (it is also mentioned in the loan agreement as recoverable from the borrower), but I have heard many borrowers complain that this is a hidden charge sprung upon them. This document is in favour of the borrower as it is conclusive proof that documents have been handed over to the lender. This is extremely useful when the loan period ends because there have been increasing the number of cases where the lenders have misplaced the title deeds and claim that these were never deposited with them in the first place. A stamped and registered document will prevent the lender from making any such claims.

In this new age, the lenders depend on the borrowers lack of attention to slip in the extra charges. It makes eminent sense for the borrowers to take the help of professionals to help them navigate through this process. The fee payable to such professionals will be more than made up by the savings in these “extra” charges.

Source : http://goo.gl/ImwYEb