How Credit Card works ?Credit cards permit you to buy goods now and pay later called buying on credit. They arent connected to your bank account. Like debit cards they can be used to buy goods in shops over the telephone and internet, with the same particulars being required. You can also get a cash advance by drawing money at bank cash machines. Your bank may offer you a credit card or you can apply for one to any institution offering one. The credit card provider will usually run checks to see if youve had problems repaying debts before offering you one called a credit check.Each month, the credit card user is sent a statement indicating the purchases undertake with the card, any exceptional fees, and the total amount to be paid. After receiving the statement, the cardholder may dispute any charges that he or she thinks are incorrect. Otherwise, the cardholder must pay a distinct minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the entire amount allocated. The credit provider charges interest on the amount billed if the balance is not paid in full. Some financial institutions can arrange for automatic payments to be deducted from the users bank accounts, as a result avoiding late payment in total as long as the cardholder has sufficient funds.Tips for selecting the right Credit CardDecided to go in for a credit card? But do not know how to select? The explosion of cards in the market would simply confuse you while choosing a card. You can, of course, choose to move with whatever comes your way, or whatever your friend recommends, but you at least need some tips and tricks that could help you to get a better card. Following are the things to be considered while choosing a credit card.1. Go through the joining fee and annual fee2. Move on the Add-on card fee3. Interest rate4. Is it a Global card or what?5. Lost card liability6. Is immediate cash withdrawal possible7. We can be in the free credit period8. Do you have a Helpline1. Go through the joining fee and annual feeNormally, a card with a higher annual fee enjoys more benefits like higher credit limit, higher accident insurance cover, accessibility to airport lounges, travel discounts etc. Or at least this used to be the case. With cut-throat competition between the card issuing banks, players are ready to waive joining fees and also one-year membership fees for anyone. Grab these offers, or negotiate this for yourself.2. Move on the Add-on card feeIf you are interested in buying add-on cards for your children, spouse or friend, ask for the add-on card fee. Remember that you will be settling the bills on the add-on card that you so movingly gift to someone dear to you the statement will come to you, and the responsibility for payment is yours (as far as the credit card company is concerned)3. Interest rateRemember, while the upfront one off fees are bread and butter for the credit card company, this is the jam! If youre the kind who forgets to pay on time, or likes to live it up and live off credit, the interest rate would be of supreme importance. Most credit card companies will charge somewhere between 2% to 3 % per month. It is always worthwhile to pay off the entire amount on outstanding date, or, if you have a large bank balance, look for card companies that provide the transfer balance facility. The balance transfer rate is lower for a certain period and then the normal rates apply.4. Whether is it a Global card or what?Nowadays this could be useful to you if you are an overseas traveler. A Global card can be used for paying expenses in foreign currency as you use a credit card to pay in rupees. Nowadays, a Global card is being issued at the same cost as for a like domestic one. It is better to have a global card, especially if there is no premium attached.5. Lost card liabilityMore Card issuers mention in the brochures that lost card liability is Rs 1000.you should careful in this that is actually after it is report to the Bank. The liability is in reality is unlimited before reporting (in cases like this, you would actually thank the credit limit because though the liability is unlimited the ceiling should logically be your credit limit, and the outlets accepting your stolen card should actually check that you (or the person who stole your card) havent exceeded your credit limit). Avoid banks that make you liable for card misuse for a single minute after reporting it.6. Is immediate cash withdrawal possible?Check out if the Bank has any ATMs near your house or workplace? This surely helps in times of emergency.7. Can you be in the free credit period The days of credit one gets depends on the statement date and the date of transaction. On a usual, you could assume you would get around 20 days of free credit. Though, if you buy just after the statement date, you could end up getting up to 50 days of credit. Look for cards which you are using which give you the highest free credit period.8. Do you have a HelplineA 24-hour Helpline service from the Card Company helps the cardholders throughout the non-banking hours. Reporting of theft, checking of available credit limit and some other enquiries can be made by the cardholder. In the end, like everything else in life, the card you want is really matters to you what matters the most to you credit, reach, the freebees, international reach or a combination of parameters. Use our card category on the left bar to simply list out the names of the cards, or choose by bank name and see the cards they offer.How Interest is charged on Credit Cards?Credit card issuers regularly surrender interest charges if the balance is paid in full each month, but naturally will charge full interest on the entire outstanding balance from the date of each purchase if the total balance is outstanding.For example; if a user had a 10,000 operation and repaid it in full within this grace period, there is no interest charged. If however even 1000 of the total amount remains due, interest would be charged on the 1,000 from the date of purchase until the payment is received. The exact manner in which interest is charged is usually detailed in a cardholder agreement which may be summarized on the back of the monthly statement.What is Grace period? A credit cards grace period is the time the customer has to pay the balance before interest is charged to the balance. Grace periods vary, but usually range from 20 to 40 days depending on the type of card issued by the bank. Generally, if a customer is late paying the balance, finance charges will be calculated and the grace period does not apply. With the majority credit cards there is no grace period if there is any outstanding balance from the previous billing cycle or statement (interest is applied on both the previous balance and new transactions). However, there are some credit cards that will only apply finance charge on the previous or old balance, excluding new transactions.Benefits to customersSince of strong competition in the credit card industry, credit card providers often offer incentives such as frequent flyer points, gift certificates, or cash back (normally up to 1 percent based on total purchases) to try to attract customers to their programs. However it should be noted that the incentive is insignificant to the interest charged for carrying a balance. Low interest credit cards or even 0% interest credit cards are available. However, services are available which alert credit card holders when their low interest period is due to expire. Most such services charge a monthly or annual fee.