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Loan for Starting Business for Low Income Earners (Rs. 5000 – 40,000)

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The startups in India are getting global attention as more and more ventures in diversified areas are coming up the country and getting funded. The dynamic entrepreneurs or founders of these startups either use their own savings or borrow money from acquaintances to start their businesses (also called as bootstrapping or self-funding) or use various funding options available to start and run their business.

However an individual with no enough capital to start and run own company and are denied funding from venture capitalists, crowdfunding, angel investors often face tough time to raise money.

And if the individual is a low income earner then utilizing own money may not be always sufficient for starting a new one. So what can such individuals, who are currently doing job but want to raise money for starting a new venture do?

The answer is personal loan for business.

There are few private, public, or co-operative banks offering loan to poor salaried individuals. Listed below is the list of banks offering loans along with their income criteria:

Name of BankMinimum Monthly Salary Required
City Union BankRs. 6,500
Jammu and Kashmir BankRs. 6,500
Abhyudaya Co-operative BankRs. 8,000
Karnataka BankRs. 10,000
Karur Vysya BankRs. 10,000
Indian Overseas BankMore than Rs. 5000
Oriental Bank of CommerceMore than Rs. 6000
State Bank of IndiaRs. 24,000 - Urban
Rs. 10,000 - Rural and semi-urban
HDFC BankRs. 20,000 - Urban
Rs. 15,000 - Rural and semi-urban
Axis BankRs. 15,000
YES BankRs. 25,000
ICICI BankRs. 20,000-25,000 - Urban
Rs. 17,500 - Rural and semi-urban
Allahabad BankRs. 20,000
Canara BankRs. 25,000
Dena BankRs. 15,000
Punjab National BankRs. 30,000
Dhanlaxmi BankRs. 35,000
Federal BankRs. 50,000
Nainital BankRs. 25,000
Ratnakar BankRs. 25,000
South Indian BankRs. 25,000
Kotak Mahindra BankRs. 25,000
IndusInd BankRs. 25,000
Deutsche BankRs. 25,000
Bajaj Finance LimitedRs. 30,000 - Rs. 40,000 (Depending on the city)

Since personal loan is an unsecured loan, banks charge high interest rate and application is scrutinized in detail to avoid any risks.

What if banks deny loan?

The very first thing to do is ask the bank about the reason for rejection. If a poor credit score is the reason then you should first improve it. This is because most of the banks will first check the CIBIL rating before approving the loan.

There are two more options to get personal loan for starting a new business:

Peer to peer lending – Although they have been present in India few years back but are now gaining attraction due to mainly because of lower interest rate, speedy approval, and minimal documentation. Most importantly borrower has an option to interact directly with the investor/lender and negotiate on the interest.

Private money lenders – The strict application process by banks and P2PL is very painful for the applicant. And this is a plus point for private money lenders who offer credit without asking for much documents but at a higher interest rate compared to banks or P2PL. Credit score is not checked by them, which is a biggest advantage. Though this option sounds very convenient, there are risks involved such as small repayment period, harassment in case of non-repayment of loan, not all are licensed lenders, illegal use of signed document and others.

Remember that using personal loan for business is different than a business loan and should ideally be taken for small business with a small loan requirement. For larger amount, business loan are highly recommended that are offered by many banks in India.

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Paytm: Money Transfer to Wrong Number, 4 Options to Get Back

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There are many apps currently in digital payment market in India such as Paytm, Google Tez, PhonePe, BHIM, Mobikwik and few others. However Paytm is undoubtedly the most widely used digital payment app in India. And for various good reasons:

  • Money can be transferred to a mobile number. No bank account details required while sending or receiving money. The deposit happens between the two wallets digitally. Although when transferring money from Paytm to your bank account, you will require account details.
  • Secured
  • Also offers recharge, ecommerce and many services
  • Frequent recharge, cashbacks, reward points etc.

Check out difference between Google Tez and Paytm.

However the most widely used feature of Paytm i.e. sending money to mobile number can also create a problem. Many times it might happen that accidentally you transfer money to wrong or unknown mobile number through Paytm app or website or you accidentally recharge incorrect mobile number.

So how to recover money after incorrect transfer?

Since bank is not an intermediary as transfer happens between two wallets, reversal is not possible. The very first thing to do is take a snapshot of the message you received on your mobile phone which states money is transferred to XXXXXXXXXX mobile number. This will act as a proof later on. Here’s the snapshot from Paytm showing cash sent to any mobile number. The blacked out portion will display the mobile number to which money was sent.

 

 

 

If the recipient is honest then he/she will give the money back. If not, then there are five options available as follows to recover money:

  1. Contact the user of the mobile number (Call and SMS) – The immediate step to take is calling the user to whom you have transferred the money. If the call is not attended or the user is not responding, drop an SMS. Mention date, time, amount, your mobile number and take snapshot. Also mention that you can check your Paytm wallet. If the user has Paytm account he can verify the details. Here’s the snapshot from Paytm wallet showing cash received. You can also send him the above cash sent image.
  2. Contact Paytm customer care – If above solution does not work out, contact Paytm customer support. They have good support staff. Although they cannot guarantee money refund. They should try their best to get you refund.
  3. Use social media – This option may not suit everyone. Put the mobile number on your Facebook and Twitter account and mention the whole background in details along with all the required snapshots. Ask your friends to spread the message. Alternatively you can search the mobile number on Google. If you are lucky, further details may be available.
  4. Contact police – This should be the final option when none of the above option works out. Take all the details such as snapshot of SMS, call log, above two snapshots and communication details from Paytm. Hopefully police should do their best to locate the user.

Additional reading: Tips on getting money back after transferring money to wrong account number.

Note that wallet companies have a policy that amount transferred cannot be reversed and it is the user’s responsibility to claim the money. Remember that it is your hard earned money, so responsibility is yours to verify twice before sending it anyone.

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Google Tez Vs. Paytm – 29 Differences & Similarities

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The new digital payment app developed by Google called “Tez” was launched on 18th September. The app has lot of new features which makes it stand out from the existing digital wallet apps in the already existing crowded payments app such as Paytm, BHIM, Mobikwik, PhonePe and others which have been encouraging digital transactions in India.

With so many apps already in India, here’s the difference between the top wallet app Paytm (the oldest and most popular) and Google Tez:

FeaturesGoogle TezPaytm
Is it a wallet?NoYes
From where is the money debited/creditedDirectly in/from the bankFrom Wallet
Is the app available in non-English language8 languages (Hindi, Engish, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu)No. Only English.
Is bank account required for sending and receiving moneyYesNo. Only active mobile number is required
Is there any option to decline a request for money?YesNo
Transaction Limit1 Lakh per dayRs. 20,000 per day
Daily number of transaction20 per dayNo limit
Web version for sending or receiving moneyNoYes
Does it have own bank?NoPaytm bank is available
Is there any separate app for business?YesNo
Is mobile number and bank account linking mandatory?YesNo
Number of options to pay moneyFour - UPI ID, QR code, Cash, mobile numberOne
Cashbacks or reward pointsNoYes
Referral rewardsYesYes
Does money remain in bank?YesNo. Money remains in the Wallet.
Can money be transferred from debit/credit card?NoYes
Can you add money in the app?NoYes
Can you make payment for utility bills, services, etc?NoYes
Any transaction fee on transfers?NoNo
How much money can be added every month?Not required as it is not a walletRs. 20, 000 per month
Does it support UPI?YesYes
Can transfer be done via website?NoYes
Any other services other than making payment?NoYes. Online recharge, bill payment, ticket booking and more.
Is the app available for Windows phone?NoYes
Is there any need to add money in the app?NoYes. For sending money it is required.
Can you transfer money without internet connectionYes through QR codeYes through QR code
Does it required top-upNoYes
Can transaction history be grouped for each personYesNo
Size of the app7 MB54 MB

Most of the Paytm features are available in other apps as well such as Mobikwik, JioMoney, BHIM, PhonePe and others. Currently Paytm outscores every app out there and is undoubtedly the leader due to the extra offerings such as recharge, ecommerce store, digital savings account in addition to mobile wallet. Moreover the rewards and cashbacks offered by Paytm attracts lot of users.

Tez is powered by the Indian government supported Unified Payments Interface (UPI). The “cash” mode feature in the Tez app lets users send and receive payment to the nearby users with Tez installed on their smartphone. There is no need for bank account details or phone number. This technology is Google’s proprietary and uses Audio QR (AQR) ultrasound technique that helps in pairing the phones. For Google Tez, the competitor is the cash currency. And the objective of this app is to encourage digital payment and make it simple and secure.

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Google “Tez” Payment App: Features, Competitors

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Digital payment in India will be getting a giant push on 18th September. The world’s best company to work “Google” is going to launch a new payment service called Google “Tez”. In Hindi, Tez means Fast.

Features:

  1. It would be a digital wallet for storing Indian currency
  2. This app is made only for the Indian market and hence has been localized accordingly.
  3. Payment service would be available both on the desktop, as a Chrome widget, and an app. The app is expected to be made available on the Google Play Store.
  4. It would support credit and debit card
  5. As the name “Tez” suggests it is expected that using this service, user can instantly send or receive money to any mobile number
  6. Payments to various services can be made through the app such as prepaid recharge, post paid mobile bill payments and so on.
  7. At retail PoS, user would be able to just wave the smartphone to make payment. No swiping of credit or debit card would be needed.
  8. It is a completely different service than Google’s existing payment service called Android Pay.
  9. Tez would support Indian government’s Unified Payments Interface (UPI). And private mobile wallets such as Paytm and MobiKwik.

Competitors to Google “Tez”

  • The already existing players in India are – Samsung Pay & Truecaller Pay would be giving stiff competition to Google.
  • By this year end, Whatsapp may also launch peer to peer payments in India.
  • Mobile wallets such as Paytm, Mobikwik, Jio Money and other players

Check out differences between Tez and Paytm

BCG and Google – Report on growth of digital payment in India

After demonetisation, India has seen a significant growth in digital payments done via mobile, tablet and desktop/laptop.

  • As per the report published by Boston Consulting Group and Google India; the usage of digital payment system industry will grow to $500 billion by the year 2020.
  • Over half of India’s population will make use of digital payments by 2020.
  • And top 100 million users will drive 70% digital payments

Let’s see how fast Tez gains momentum in India in a already crowded digital payment system.

 

 

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Invest Rs. 500 Monthly, Earn Rs. 2,71,061 on Maturity: 100% Safe

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Investing is a key to safeguard your financial future. No longer can you rely on interest earned on savings account to meet the future expenses. Especially for salaried individuals it is very essential to invest money regularly because of uncertainty in the job market coupled with the rising inflation.

Whether the amount is small or large, regular investment for a long term is the best recommended solution to generate sufficient corpus that can take care of your daily needs during the retirement period or other future expenses such as child’s marriage, higher education, medical expenses, and others.

In this article we will consider investing Rs. 500 every month (i.e. Rs. 6, 000 annually) and the estimated returns. Such investments are best recommended for conservative investors who do not want to take risk with their hard earned money.

There are many options where an individual can put their money giving 100% assured returns i.e. zero risk products. The only drawback of such investment is that the returns are small. Safety of money is of high importance.
Instruments falling under zero risk category are – public provident fund (PPF), bank fixed deposit (FD), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), and few others.

Here’s the table showing the returns (post maturity) after investing Rs. 500 every month i.e. Rs. 6, 000 (yearly):

Investment ProductInterest RateStandard Tenure (In Years)Invested Amount (In Rs.)Expected Return/Maturity Amount (In Rs.)
Sukanya Samriddhi Yojana8.3%1484, 0002, 71, 061
Bank Fixed Deposit10.25%1060, 0001, 98,096
Tax Saving FD6.9%530, 00040, 350
Public Provident Fund8.1%1590, 0001, 77,484
National Savings Certificate8.4%56, 0009, 053
Recurring Deposit6.5%1060, 00084, 494
Senior Citizen Savings Scheme (SCSS)8.6%530, 00042, 900

As you can see above, Sukanya Samriddhi Yojana (SSY) is the best investment option especially when you have a girl child. You need to invest only for 14 years and the returns are very significant. Read more on SSY here.

The tenure for few products is varying and its upto the investor to decide for what period investment should be done. For e.g. bank fixed deposit can be opened for minimum 7 days and each bank offers different interest rate, interest rate on government run schemes such as PPF & SSY keep on changing periodically, recurring deposit can be done for 1 year as well and so on. But as mentioned above, long term investment in low risk products will only provide higher return. Although the returns are less compared to high risk high return products.

Also, the interest rates for the above listed risk-free investments keep on changing and also vary with each entity.

There are other products for no risk taking investors such as gold, silver, diamond, tax-free bonds but the investment amount required is significant. But the ones listed above are the highly recommended and used by the low income investors.

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Health Insurance: Coverage, Exclusions, NCB, Reimbursement & more

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Whether you are healthy or not – we’ve been told numerous times that keeping good health is very essential. But in our quest for healthy life we also need to opt for health insurance (also known as medical insurance). This is because there is no guarantee that your body will remain always fit.

Health insurance covers medical expenses during hospitalization. Not just an individual but health insurance can cover entire family by paying a premium. This can be paid every month, quarter, or annually. And the medical insurance policy can be purchased online, app, visiting in-person at the insurer or through agents.

Health insurance comes handy during difficult situations. However it is very essential to know as many details possible in a health policy for a better claim process:

Financial support: The most important benefit of health insurance is that it safeguards you and family from financial burden which often leads to mental stress when you are ill. If there is no health insurance policy taken then the person has to use his/her hard earned income to meet various expenses.

Coverage: Most of the policies cover medical and hospitalization expenses including surgical operations, nursing care, doctor’s fees, pathology and diagnostics test, hospital accommodation and other pre and post hospitalization expenses.

Exclusions: There are however, some exclusions in health insurance like pre-existing diseases, cosmetic surgery, abortion and alternative therapies. Certain conditions have a minimum waiting period such as pregnancy, heart ailments and others. All these exclusions are detailed in the policy document. This is the reason why it is recommended to buy health cover when you are young and fit. The chances of developing diseases are low compared to when you are aging. Also the premium is high when buying at old age.

Claims during 30 days of buying the policy: Not all medical claims are accepted, if they are claimed within first month of purchase. This also includes pre-existing ailments which are covered after the expiry of a specified period.

No claim bonus: By making regular renewal payments and keeping yourself fit with no claim made, you increase the chances of better claim experience. Most importantly, insurer will reward you with reduced premium if no claim is made in previous year. This however, varies with each insurer. If you fail to renew the policy then any treatment cost incurred during the uncovered period will not be accepted by the insurer.

Policy transfer: If you are not happy with the existing insurer then you can transfer the policy to another insurance company. Other reasons leading to porting are – lack of features, job change, lesser number of network hospitals, poor claim process or settlement history and many others.

Read about 7 types of health insurance policies

Hiding medical problems: Hiding any existing condition is never recommended. This is because, if you make a claim and insurer comes to know that you did not disclose this condition intentionally while buying the policy, then claim will be rejected. This is clearly mentioned in the policy document. Remember that settling a claim is loss making for any insurer. And they will list out every reason to deny a claim. So be true when it comes to any insurance policy. If you disclose the condition before buying, then pre-existing disease will be covered after a certain period. This is known as waiting period. Typically the period is 36 or 48 months, as specified in the policy document.

Increase coverage by making higher premium: If at any point of time, you feel that existing policy is not sufficient to cover yourself or your family then you can always pay higher premium and raise the coverage.

Get claim if hospitalized for less than 24 hours: Certain procedures such as dialysis, eye surgeries and others does not need hospitalization for one full day. This is the reason many insurers settle claims in such cases. One more advantage is that many treatments that do not fall under day care or which do not require the insured to be hospitalized for one complete day, are also covered by insurers. However the list of procedures covered is very limited. And you should be aware of the same while before purchase the policy.

Not every expense is reimbursed: Remember that, buying a policy by paying high premium doesn’t mean entire bills will be reimbursed. Sub-limits are applied on various expenses. Certain medical bills are also not reimbursed if they fall under non-admissible expenses. When a insured person is ill and hospitalized, then there could be many other expenses which are not covered in the plan. And you will not get reimbursement for the same.

Multiple claims: You can take as many claims possible in a year. However the maximum amount is limited to the sum insured. This amount is as per the chosen plan.

 

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SBI Student Plus Advantage Credit Card: No Fees, Free Add-On Card & more

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State bank of India is one of leading public sector banks in India. Amongst many services offered by SBI, credit card is one of them. The bank offers credit cards for various purposes such as travel, shopping, lifestyle and many others.
However it is one of the very banks offering credit card for students. The name of the card is – SBI Student Plus Advantage Card.

Benefits and features offered by Student Plus Advantage card:

No joining and annual fee: Expensive cards carry very high joining and annual fee due to the benefits offered. However in case of Student Plus Advantage card both these fees of NIL. But if the student does not spend more than Rs. 35, 000 in the previous year then charge of Rs. 500 will have to be paid during renewal.

Supplementary card at free of cost: If the student maintains a good repayment history then SBI offers add-on card option as well. That is, family member of the student (father, mother, siblings) can get credit card for free. Add-on card is an excellent feature for someone with credit history to start building credit score.

Additional reading: Credit card for Indian students travelling abroad.

International usage: Card can also be used for international purchase. So this is a good opportunity for students travelling in countries like USA/Australia or others where credit card is the most common form of payment accepted for most purchases such as insurance premium, gas, grocery etc. However remember that student should avoid making foreign transaction and ATM cash withdrawal using this card. This is because there is a charge of 3.5% and 2.5% to 3% respectively. 3% is the cash advance fee when card is used for withdrawing money from an international ATM.

Read more on travel cards for Indian students.

Balance transfer: If the student is having any other card with huge balance then balance transfer (BT) facility can be used. Benefit is that, the rate of interest is low and balance can be repaid in EMI.

Flexi-pay option: If student makes any big purchase in any month and full repayment is difficult then SBI offers an exciting feature called flexi-pay wherein student can convert the transaction into easy installments. The tenure available is 6, 12, and 24 months. Minimum limit for the transaction amount is Rs. 2500, which seems to be a better deal.

Reward points: Student gets 10X reward points on using the card for making payment at departmental or grocery store both in India and abroad.

Eligibility:

  • Applicant must be the education loan customer of SBI
  • He/she should be 18 years of age

Should student use credit card in India?

Credit card is a good option to start building credit score. Assuming student doesn’t have any type of loan/credit repayment history, having a credit card is a recommended to start building history. However good CIBIL score is possible only when the monthly bills are paid on time, in full, and credit limit is not over crossed.

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11 Credit Cards for Businessmen in India

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Like salaried individuals, businessmen or self-employed individuals (doctors, freelancers, shopkeepers and others) also need credit card for making payment for day to day expenses.

There are many banks in India who offer credit cards especially for business.

Listed in the below table is the list of exclusive credit cards for businesses:

Bank NameCredit Card Name
HDFC BankBusiness MoneyBack
HDFC BankBusiness Regalia
HDFC BankCorporate Platinum
HDFC BankCorporate Card
Axis BankMY Business
ICICI BankJet Airways Business Advantage
ICICI BankBusiness Platinum
ICICI BankBusiness Gold Card
Standard CharteredPriority Bank Visa Infinite
State Bank of IndiaPlatinum Corporate card
IndusIndBusiness Gold Credit

What to look for in a credit card for business?

If most of your spends will be through credit card, then look for following features in the card.

High credit limit: Although the limit on the card is decided by the banks based on the income and other factors such as (past repayment history, credit score etc.), businessmen should try to get a card with high credit limit. This is recommended to keep business running even in difficult times, when possibility of getting a loan is less.

Insurance cover: Many business credit cards such as Standard Chartered Priority Banking Visa Infinite Credit Card – provides complimentary travel and medical insurance of up to US Dollars 200,000 whenever international trip is made.

Cashback: Chose a card offering cashbacks i.e. certain percentage of the amount spent is paid back to the owner of the card. This money can then be used to buying other essential stuffs. But before checking this feature remember that whether the cash back percentage on everything you purchase or you need to spend pre-fixed amount in order to get X amount back.

Waiver on fees: Try to get a card offering full waiver on services such as duplicate statement, checking balance enquiry, card replacement etc.

Interest free period: It is recommended to pay your monthly bills before the due date in order to avoid interest and negative impact in the CIBIL record. Since your sole income would be from the business, it is quite possible that you may face ups and downs. For e.g. you face a dip in income, get delayed payments, etc. In such situations, it is very likely that you may not be able to pay monthly repayments on time and at the same time increase the usage of credit card. In such situations, look for card offering a high interest free period. This is nothing but number of days provided to pay off the bill (every month) before interest rate is applied on the balance.

Fuel surcharge waiver: If your business involves lot of travelling by roads and using own vehicle, then fuel surcharge waiver card is worth recommended. If you calculate savings, it will be significant.

Reward points: If you have decided to carry out purchases related to day operations such as buying stationary, office supply items etc. then look for a card giving high reward points.

Free miles: If you frequently travel through air, then look for a card offering free air miles and lounge access (domestic and international). Many companies also offer free miles when high amount is spent through the card.

Foreign currency and ATM cash withdrawal fee: Most of the banks charge 3.5% cross currency mark-up fee. However being a businessmen or self-employed it is quite common to transact in non-Indian currency. Therefore look for a card offering lowest foreign currency markup fee on international usage. For e.g. SBI Card Elite Advantage has a charge of 1.99% on international usage.

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2 Ways to Get Credit Card for Free in India

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In India or even in any foreign country, credit card application is approved based on the credit score and income of the applicant.

However not everyone can get credit card if he/she has no income source. Even if the credit score is good, chances of rejection are high due to no income. There could be many reasons for having no earning source such as – loss of job or applicant is a first timer etc. However this does not mean such individuals cannot get credit card.

Ever heard of getting free credit card without requiring the applicant to furnish income proofs such as salary slip, IT returns or any other?

There are two ways to get credit card for free in India and no credit score is checked:

Add-on card:

This is also called as supplementary card. And it is offered to the relative of the primary card holder of the same bank. The condition is that primary card owner should have a good repayment history and a good credit score. Not all banks offer such cards.

Benefits and features available on primary card are also applicable to the secondary. Application process is very simple and not like traditional card.

Against fixed deposit:

If the applicant has been holding fixed deposit account with the applied bank, then he/she can get credit card against fixed deposit. That is, you are keeping the money in the account as a security. For such cards, limit is 80%-85% of the FD amount. So if someone has Rs. 1, 00,000 (1 Lakh) in the account then he/she can get credit limit of around Rs. 80, 000.

Additional reading: Best cards against FD.

But remember that every bank has minimum amount and period for which the FD account is active. So basically, you cannot open FD account today and apply for credit card tomorrow.

These free credit cards come with few limitations:

  1. Credit limit is low. In case of supplementary card, limit is shared between the cards.
  2. In case of add-on card, if the secondary card holder defaults on the payment, then primary holder will have to make repayment and also his credit score will get impacted. So be careful for whom you are applying for a card. Monthly statements are consolidated.
  3. Add-on card cannot be taken for friend. Only spouse, parents, or children can be granted such cards.

Both these cards are a good solutions for improving the credit score.

However remember following points in mind, irrespective of the card you use:

  1. Always repay bill on time and fully. There should be on outstanding bill.
  2. Do not over cross the credit limit.
  3. Use auto-debit feature for bill payment. Benefit is that you do not have to remember due date.
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4 Contactless Credit Cards in India: Benefits, Features, Cons

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There are many types of payment methods used online or offline by the consumers such as cash, debit card, credit card and others.

Each of these options has its own pros and cons. However the most widely used option is credit card due to the benefits involved such as – cashbacks, reward points, etc. But credit card has its limitations too.

Take for example common scenario seen in shopping malls, clubs, hotels, and other places where credit card is swiped and the owner enters the pin for making the payment. However the security threat associated with such payment is very weak. Anyone including the people standing nearby can see your PIN and use it unethically and may lead to fraud.

Enter into a PIN-free world – Fast, Secure, and Easy.

To minimize such frauds/thefts, few banks in India offer contactless credit card. Such type of card requires the owner to just tap or wave the card at point of sale (PoS) terminal. There is no need to swipe and enter PIN.

Listed in the below table are the contactless credit cards available in the Indian market.

FeaturesICICI Bank CoralICICI Bank HPCL Coral VisaSBI SignaturePNB - Wave and Pay
Annual feeRs. 500Rs. 199 (from second year onwards)Rs. 4000NA
Joining feeRs. 1000Rs. 199Rs. 4000NA

How to use contactless credit card for making the payment?

  1. Merchant will enter the amount on the contactless Point of Sale (PoS) machine.
  2. While making payment, you just need to tap or hold the card within 4 centimeter distance. Make sure there is a little symbol )))) on the machine.
  3. If the payment is successful, you will see a green light or beep sound from the PoS device.
  4. Receipt will be generated on the spot. In addition to this, card holder will get SMS/E-mail on their registered details containing the transaction details.

Other benefits apart from contactless transaction:

This card can be conveniently used in two ways: Tapping/Waving (contactless way) and Swiping/Dipping and then entering PIN (contact payment). And it’s upto the user to decide, which option he/she wants to use.

The moment you wave or tap, the whole process happens within seconds. That is, the transaction takes place fast compared to traditionally used technique of swiping.

Since the card is not required to be handed over to the merchant at the PoS, the security is high. And card skimming (technique used by fraudsters) is largely minimized.

Even if the card gets tapped or waved multiple times, the amount is still deducted once.

Like other cards, they can also be used for ATM cash withdrawal. However owner has to follow traditional process i.e. enter card in the ATM terminal, then enter PIN & then amount.

Cons:

If card gets stolen then anyone can use it. This is why it is recommended to block the card immediately it gets stolen to prevent loss.

There is a maximum limit applied for each transaction. This is as per the rule set by Reserve Bank of India to prevent misuse. For e.g. SBI signature has a maximum cap of Rs. 2000 per transaction.

Not every merchant in India has contactless card machine.

How to make payment using contactless credit card, if the merchant does not accept such card?

At such places, you will have to pay using traditional method i.e. by entering PIN after the merchant enters transaction amount and swipes the card and asks to enter the PIN.

Since this card has a transaction limit associated, it is best recommended to use it for everyday purchases to save time.

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