Credit Cards | Business Upturn

How to increase your CIBIL score or credit score?

Markets Desk — Sat, 27 Apr 2024 09:46:38 +0000

Maintaining a strong credit score is crucial in today’s financial landscape as it can significantly impact your ability to access credit, secure favorable loan terms, and even influence employment opportunities. In India, the CIBIL score or credit score, ranging from 300 to 900, is a widely used metric that lenders rely on to assess an individual’s creditworthiness. If your CIBIL score is less than ideal, don’t worry – there are several proven strategies you can implement to improve it. Here are seven effective and best ways to boost your CIBIL score.

1. Make Timely Payments

The single most important factor influencing your CIBIL score is your payment history. Ensure that you make all your bill payments, including credit card dues, loans, and utilities, on time. Set up automatic payments or reminders to avoid missed or late payments, which can significantly drag down your score.

2. Maintain Older Credit Accounts

The length of your credit history is another crucial factor in determining your CIBIL score. Keep your older credit cards active and in good standing, as this helps demonstrate your ability to manage credit responsibly over an extended period.

3. Optimize Credit Utilization Ratio

Your credit utilization ratio, which is the amount of credit you’re using compared to your total available credit, has a significant impact on your CIBIL score. Aim to keep your credit utilization below 30% by either increasing your credit limits or paying down your balances.

4. Diversify Your Credit Mix

Having a healthy mix of different types of credit, such as credit cards, personal loans, and mortgages, can positively impact your CIBIL score. This demonstrates your ability to manage various forms of credit responsibly.

5. Dispute Errors in Your Credit Report

Regularly review your credit report and be vigilant for any errors or inaccuracies. If you find any, initiate the dispute resolution process with CIBIL to have them corrected, as these can negatively impact your score.

6. Leverage Experian Boost

Experian Boost™ is a free service that allows you to include your utility and telecom payment history in your credit file, potentially increasing your FICO® Score. This can be a valuable tool for those with limited credit histories.

7. Avoid Excessive Credit Applications

Each credit application you make results in a hard inquiry on your credit report, which can temporarily lower your CIBIL score. Limit your credit applications to only what you truly need to avoid damaging your score.By implementing these strategies, you can steadily improve your CIBIL score over time and position yourself as a more attractive borrower in the eyes of lenders. Remember, building a strong credit profile is a long-term process, but the benefits can be significant in terms of accessing better credit terms and financial opportunities.

The power of credit cards in everyday expenses

Finance Desk — Wed, 21 Feb 2024 11:02:04 +0000

Credit cards have emerged as powerful tools for managing day-to-day expenses, offering unparalleled convenience and a myriad of perks. One of the most enticing features is the opportunity to earn cashback on everyday purchases, with providers in India offering rewards on categories like groceries, fuel, and utility bills. Additionally, credit cards often feature reward programs allowing users to accumulate points for various benefits, including discounts on shopping, travel, or even cashback.

Exclusive discounts and offers at partner merchants further enhance the credit card experience, spanning dining, shopping, and entertainment. Responsible credit card use positively impacts an individual’s credit history, contributing to a higher credit score and improved financial opportunities.

In the realm of online shopping and digital transactions, credit cards provide unmatched convenience, streamlining payment processes for flights, food orders, and online purchases. The grace period offered by credit cards, typically ranging from 20 to 50 days, allows users to make interest-free purchases, enhancing cash flow management.

Moreover, credit cards serve as financial safety nets during emergencies, providing quick access to credit lines for urgent needs. The comprehensive record provided by credit card statements assists users in tracking and managing monthly expenses, facilitating informed financial decisions and potential savings.

While incorporating credit cards into financial routines can bring about numerous benefits, it’s crucial to use them responsibly. Paying attention to due dates and maintaining a healthy credit utilization ratio ensures a positive and rewarding credit card experience.

RBI’s crackdown on BPSPs: Unraveling the recent disruption in commercial credit card transactions

Finance Desk — Fri, 16 Feb 2024 12:25:24 +0000

The Reserve Bank of India made headlines by intensifying its scrutiny of select fintech companies. Notably, the RBI directed payment giants VISA and Mastercard to suspend credit card payments for specific institutions. The RBI pointed out that an undisclosed “Card Network” had engaged in arrangements not approved by the RBI.

To grasp the situation, it’s essential to comprehend the concept of a Business Payment Service Provider (BPSP). Imagine running an art business, requiring a steady supply of materials. Typically, a trusted supplier demands immediate cash payment, posing challenges for businesses with tight working capital.

In recent years, fintechs entered the scene, becoming BPSPs to disrupt traditional business transactions. They collaborated with banks to offer co-branded credit cards, utilizing established payment networks like Visa and Mastercard. This innovation allowed businesses to pay suppliers via credit cards, even if the suppliers lacked the infrastructure for such transactions.

This approach offered benefits to all parties involved. Businesses received extended credit periods, suppliers experienced faster payments, and banks facilitated swift transactions.

Several BPSP companies, such as PayMate, highlighted this feature prominently on their websites. However, recent developments indicate a setback for BPSPs. The RBI’s clarification instructed “the Card Network,” likely Visa, to halt commercial credit card transactions facilitated by BPSPs.

The RBI claims this practice lacks legal sanction, citing the absence of a license under the Payment and Settlement Systems Act of 2007. The issue also involves Know Your Customer (KYC) norms, potentially related to businesses using credit cards for non-merchant transactions, like paying rent to landlords.

While BPSPs argue they require licenses, the RBI’s unexpected move has left the industry uncertain about its future. As the story unfolds, we await further developments and hope for a temporary ban with prompt resolution of any regulatory concerns or loopholes.

HDFC Bank and Tata Neu collaborate to launch rewarding credit cards

Yakita Somani — Wed, 24 Aug 2022 13:32:16 +0000

A partnership between Tata Neu and HDFC Bank was announced in order to introduce one of India’s most lucrative co-branded credit cards. Tata Neu Plus HDFC Bank Credit Card and Tata Neu Infinity HDFC Bank Credit Card are the two variants that will be available.

Customers of Tata Neu can apply for a credit card through the Tata Neu app and access important information about the card through the app, making the process quick and rewarding. The card will be offered in both versions on the RuPay and Visa networks.

The card’s ability to reward users with NeuCoins (1 NeuCoin = INR 1) for all purchases made in-store and online makes it unique as well. On all purchases made on partner Tata brands, both online and in-store, customers will earn 2% NeuCoins with the Tata Neu Plus HDFC Bank Credit Card and 5% NeuCoins with the Tata Neu Infinity HDFC Bank Credit Card.

Customers will receive 1% and 1.5% NeuCoins on the appropriate card variants for domestic and international purchases made outside of partner Tata brands.

Customers will be able to shop in a variety of categories, including grocery, travel, electronics, fashion, health, and wellness. The Tata Neu HDFC Bank Credit Card aligns with Tata Neu’s core proposition of making Indian consumers’ lives easier.

The cards take advantage of the strengths of both brands to give customers better value and a seamless experience, leveraging Tata Neu’s omnichannel presence across key categories and HDFC Bank’s position as India’s top card issuer.

Indian fintech startup, Slice, raises $20 million in equity funding

Diya S. — Mon, 28 Jun 2021 10:06:06 +0000

On June 28, Indian fintech startup slice informed that it has raised $20 million in a new financing round. The startup that has built a ‘super card’ for Indian millennials will be adding new features to change how people engage with their credit cards.

The amount is being raised in equity funding from existing investors Gunosy and Blume Ventures among others at a valuation which is not revealed yet. The Bengaluru-based startup offers flexibility to customers concerning payment of credit card bills and reward points on transactions.

The members can receive rewards up to 2 per cent on every card transaction which are directly redeemable in cash. In addition, they can slice their card bills for free for over three months as a result of which they can get an interest-free period of up to 90 days. It is considered the longest in the industry.

The founder and Chief Executive of the fintech startup Raj Bajaj has said to The Economic Times that slice would utilize the capital to diversify your offerings and expand its team. He told TechCrunch that it is now bringing rewards to its app since it attempts at turning the plastic card into a larger financial instrument.

He added, “Banks treat credit cards like a loan product instead of a high frequency payment instrument and make money through late charges and interest rates.” Hence, the main focus of the banks is the optimization of credit card-related fees as well as portfolio schemes to increase the loan book.

Shinji Kimura, the Chairman and Chief Executive Officer of Japan-based Gunosy Inc. has said that startup’s biggest advantage is how well they understand millennials and Gen Z.

Industry Group warns: Credit/Debit card supply could be affected due to Global Chip Shortage

Aryan Jakhar — Sun, 27 Jun 2021 12:54:40 +0000

The online payment system is being threatened by a global chip scarcity. The Smart Payment Association has warned that if the issue is not solved, it would cause major disruptions in ordinary life and trade. More than 3 billion EMV-based payment cards are manufactured each year for customers who open a bank account, renew them when they expire, or replace them, according to the report. However, owing to supply chain constraints, card makers are having increasing difficulty getting chips.

To avoid severe disruptions, the payment card and mobile payments industry’s trade association has urged government authorities and stakeholders to enhance supply. Nearly 90% of non-cash consumer purchases are done using cards at physical businesses, and they are also important for obtaining cash, according to the report, which also stated that payment cards enable 40-60% of internet payments directly or indirectly. As a result, maintaining a continuous supply chain for payment cards is critical to business and daily life.

Last year, the pandemic prompted chipmakers to close their doors. They had a backlog to clear when they reopened. As they hobbled back, they were slammed by an unexpected surge in worldwide demand for electronics. Major shortages of goods such as PCs, mobile phones/tablets, gaming consoles, and, most notably, vehicles have struck the semiconductor sector in recent months. Because there was insufficient supply of chips, equipment makers had to postpone their manufacturing lines. And it looks that the scarcity is spreading to other industries as well.

The body praised the payment card industry’s tenacity throughout the epidemic, saying it helped banks under unusual conditions, providing cards amid lockdowns wherever and wherever they were required.

“Now, with the global chip shortage another threat has been emerged,” the trade body added.

According to the association, the bottlenecks in chip supply have become critical and now, card manufacturers are facing increasing difficulties in obtaining the chips, and that this kind of shortage is likely to continue throughout 2022. It cautioned that considerable disruption is on the horizon, posing a threat to card makers’ capacity to satisfy full demand.

The association further added that it has initiated some actions to ensure an adequate supply of payment cards but urged governments to do more. They said further that, the card manufacturers working with the association are making “every effort possible” to minimise card delivery disruption.