Mon. May 20th, 2024
kotak 811 credit card

Credit cards are valuable financial tools that offer convenience, flexibility, and various benefits. However, the world of credit cards can sometimes be confusing due to specialised terminology. 

Just like a debit card is also known as an ATM card, many call a credit card plastic money. However, unlike debit card benefits offered by financial institutions like Kotak 811, credit cards have several advantages. 

In this article, we will break down key credit card terms and provide clear explanations to help you easily navigate the credit card landscape.

Credit Card Basics

  1. Credit Card: A credit card is a payment card that allows you to borrow money from a financial institution, up to a predetermined credit limit, to make purchases.
  2. Credit Limit: The credit limit is the maximum amount of money you can borrow on your credit card. It is determined by the credit card issuer based on factors such as your credit history, income, and creditworthiness.
  3. APR (Annual Percentage Rate): The APR represents the annualised interest rate charged on any outstanding balances on your credit card. It includes both the interest rate and any additional fees or charges.
  4. Minimum Payment: The minimum payment is the lowest amount you must pay monthly to keep your credit card account in good standing. It is usually a percentage of the outstanding balance or a fixed amount.


  1. Annual Fee: An annual fee is a yearly charge imposed by some credit card issuers for the privilege of owning the card. Not all credit cards have annual fees.
  2. Late Payment Fee: A late payment fee is a penalty for failing to make the minimum payment by the due date specified in your credit card statement.
  3. Over-Limit Fee: An over-limit fee is charged when you exceed your credit limit by making purchases that push your outstanding balance beyond the approved credit limit.
  4. Foreign Transaction Fee: A foreign transaction fee is a charge credit card issuers impose for transactions made in a currency other than the card’s designated currency. It is typically a percentage of the transaction amount.

Rewards and Benefits

  1. Cashback: Cashback is a reward offered by credit cards where you earn a percentage of your purchases as a cash rebate. It can be redeemed as a statement credit or deposited into your bank account.
  2. Reward Points: Reward points are earned for making purchases with your credit card. Depending on the credit card’s rewards program, these points can be redeemed for various rewards, such as merchandise, travel, or gift cards.
  3. Airline Miles: Airline miles, also known as frequent flyer miles, are earned through specific credit cards and can be redeemed for flights or other travel-related benefits.
  4. Introductory Offers: Introductory offers are promotions provided by credit card issuers to attract new cardholders. They may include features like a low or 0% introductory APR, bonus reward points, or waived annual fees for a limited period.

Credit Card Security

  1. CVV: The Card Verification Value (CVV) is a three-digit security code printed on the back or front of a credit card. It is used as an additional layer of authentication for online and phone transactions.
  2. EMV Chip: EMV (Europay, Mastercard, and Visa) chip technology is a security feature embedded in credit cards. It provides enhanced protection against fraud by generating a unique code for each transaction.
  3. Fraud Protection: Credit card issuers offer protection services to safeguard cardholders against unauthorised transactions. They monitor suspicious activities and may provide reimbursement for fraudulent charges.

Credit Card Terms

  1. Grace Period: The grace period is between the end of a billing cycle and the payment due date. You can pay off your balance in full without incurring interest charges during this period.
  2. Balance Transfer: A balance transfer involves moving the outstanding balance from one credit card to another, usually to take advantage of a lower interest rate or promotional offer.
  3. Credit Utilisation Ratio: The credit utilisation ratio is the percentage of your available credit that you are currently using. It is calculated by dividing your outstanding balance by your credit limit. Maintaining a low utilisation ratio is generally favourable for your credit score.

Understanding credit card terminology is crucial for managing your credit card effectively and making informed financial decisions. By familiarising yourself with these key terms and definitions, you can confidently navigate the credit card landscape, maximise your kotak 811 credit card benefits, and avoid unnecessary fees or pitfalls. Use this knowledge to your advantage and enjoy the convenience and perks of responsible credit card usage.

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