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Credit Cards for Students Travelling Abroad

Credit Cards

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May 5, 2016

Credit Cards for Students Travelling Abroad

Credit Cards offer a world of convenience whether you are a student or a professional and whether one is India or is travelling abroad. However, for someone travelling abroad, the requirements may be different then what would generally be required when staying within the country. Also, each card has different features so all cards might not be suitable for using abroad. So if one is a student going abroad then how do you choose the right card for yourself?

How is Using Your Credit Card Abroad Different?

The first thing obviously is a different currency. Depending on the country you are travelling and the currency being used there, your credit limit would automatically be enhanced or reduced when you travel. All currencies do not have the same exchange ratio, so if you travel to Europe remember that the current Euro to INR rate is I Euro = 76 INR so your credit limit will be reduced in that ratio. Before choosing a credit card do compare credit cards as per the available credit limit so that you can choose one as per your requirements in the country you will be visiting.

Then another difference is the various charges that may be levied by a credit issuer for using the card abroad. These charges are a significant factor when making a choice as for a student travelling abroad these could prove to be a huge burden as obviously there will be multiple transactions and paying a hefty fee/transaction could prove to be very expensive.

Also Read – 5 Best Travel Insurance in India

Factors to Keep in Mind When Choosing a Credit Cards:

When choosing a card for travelling abroad make keep the following factors in mind so that you can choose the best card as per your requirements.

Charges and Fees:

As we said in the above paragraph there are various types of fees applicable when credit cards are used abroad. These fees include the foreign currency conversion fee which may range between 1 to 2 % depending on the card issuer’s policy. The major portion is charged by VISA or MasterCard and a small portion is kept by the bank. Another charge is the foreign transaction fee which could be around 2.5% to 3.5. Then there is the cash advance fee, within the country also cash advances are expensive, when doing so abroad you have to pay 1% to 4% extra! When you apply for credit card make sure you check about all these charges.

Acceptance:

Another aspect that requires focus is the card’s acceptance in the country you are travelling to. All cards might not be accepted everywhere, this could be due to a difference in the technology used or some other reason.

Customer Care and Ease of Contact:

One does not want to be stuck in foreign country with a card which offers no customer care or sloppy after sales services. Problems could range from a lost card, to card not being accepted, to emergency cash requirements and so on. It is important that the card issuer has a mechanism in place to take care of their customers abroad and offers them a speedy and effective solution.

Ease of Making Payments:

Any credit card whether used in India or abroad requires paying promptly on time every month. Usually for a student credit card a parent may be paying the credit card bills, whether the student pays or a parent makes the payment, make sure the process is hassle free else late or missed payments could impact CIBIL score, attract fines and hamper credit card usage.

Also Read – Best Credit Card in India – Review & Comparison

Special Credit Cards for Students Travelling Abroad

Keeping in mind a large number of students travelling abroad and their special requirements, many banks has come out with credit cards especially suited for students travelling abroad. Some of them are discussed below.

HDFC Regalia Credit Card: The card offers a low foreign currency fee of 2% and also complimentary airport lounge access.

SBI Student Plus Advantage Card: This card is issued to those students who have taken an education loan for abroad from SBI or against a deposit at SBI.

ICICI Bank Student Travel Card: This card gives a free membership of ISIC (International Student Identity Card) which can be used as an internationally accepted ID Proof and also allows one to use various discounts.

Choosing the right credit card as per your requirements is paramount if one wants to enjoy full benefits of using a credit card without any hassle so make sure you make the right choice.

Written by Arun Ramamurthy, Director, Credit Sudhaar & author of Unlock the Power of Your Credit Score : India’s first book on Credit Scores

Kindly note that Moneyexcel.com is not associated with Credit Sudhaar. This post is for information purposes only. This is a guest post and NOT a sponsored one. We have not received any monetary benefit for publishing this article.

Peer to Peer Lending – P2P lending quick and easy way to get loan

Personal Finance

Shitanshu Kapadia

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April 30, 2016

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A Peer to Peer Lending (p2p lending) concept is growing rapidly in India. Peer to Peer lending is easier and faster way to lend and borrow loans.

Let us say you are running out of money and you are in desperate need money for setting up a new business, medical expense, self-marriage, medical expense or anything else. What do you do? You generally talk to your friend or relative for the money or you approach a bank and take a personal loan – right?

Well, what happens if both the options are not available to you? Don’t worry p2p lending platform may solve your problem. In this post, I will be discussing peer to peer lending in detail.

Also Read – P2P Lending – How it works? Concept and Regulation

What is Peer to Peer Lending – P2P Lending?

Peer to Peer Lending is an easy, convenient and hassle-free method, where individual lender lends unsecured loan to a borrower at a suitable interest rate. In P2P lending people who need money connects with people who are willing to lend on online web based platform. Peer to Peer lending is alternate but reliable financing option for many individuals. This option is now available in India. Let’s try to understand how p2p lending works.

How P2P Lending Works?

Step -1 – You need to register on the p2p platform as borrower or lender. During registration, you need to provide personal, professional and financial information.

Step-2 – P2P platform verifies the credibility of this information by checking documentary proof. This is in line with KYC verification norms.

Step-3- Once verification is completed lender or borrower can publish their listing on the site mentioning information like the purpose of the loan, interest rate etc.

Step-4 – Borrower or lenders can contact each other. They can also see documentary proof before lending a loan.

Step -5 – Loan tenure, a rate of interest and other terms and conditions are discussed between lender and borrower.

Step-6 – On agreement of both lender and borrower disbursement of loan happens. During disbursement P2P platform plays an important role in making loan agreement and money transfer from lender to the borrower.

how p2p works

Also Read – 5 Best Banks for Personal Loan in India

What are the benefits of P2P?

Benefits of peer to peer lending to investor or lender

Lender or investor can use surplus money to lend and can generate extra income.
Investor decide how much money he want to lend to borrower at what interest rate.
P2P lending is easiest way to generate regular passive income for the investor.
As investor can help someone in fulfilling their dream it is like leaving mark on someone’s life.

Benefits of peer to peer lending to borrower

Borrowing is easy and less time consuming.
Fixed rate loan once rate is fixed with lender it will not change.
No prepayment fees you can choose to fully pay your loan early, there won’t be a penalty fee for closure.

What are drawbacks of P2P?

As loan is unsecured if borrower default with nonpayment of EMI you can lose your money.
It is easier for criminal to cheat an online lender by providing fake identities.

How Peer to Peer Lending is different from Traditional banks?

Difference between Traditional banks and Peer to Peer Lending is given below.

How I can avail P2P Loan?

There are multiple P2P Loan lending companies in India. If you are seeking P2P loan you can log on to following websites.

Lendbox
Faircent
i2ifunding

Should you use Peer to Peer lending?

You can use Peer to Peer lending for borrowing money. It is a quick and easy way to get a loan. However, if you are lender please wait. At the initial instant, it looks very lucrative for lending money using P2P. However, there is a risk of unhealthy practice being adopted in this sector. It is unorganized sector without any regularization. You may end up making losses by lending money to the unknown person.

Also Read – 20 Types of Loans in India

Over to you

Have you heard about P2P lending?

Do you use P2P lending for lending or for your fund requirement?

Do share your experience.

Feel free to post your query about P2P lending. I will be happy to answer it.

To do list for NRI before leaving India – Financial Checklist for NRI

Personal Finance

Shitanshu Kapadia

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April 27, 2016

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To do list for NRI before leaving India – Financial Checklist for NRI

NRI means a person who works or stays outside India more than 181 days. My one of the friend has recently got H1B visa and he is flying to the USA. If he stays in the USA for next 181 days he will get NRI status. He approached me with following questions.

What should he do about his bank account before leaving India?
What should he do for the existing fixed deposit?
What to do about existing Mutual Fund and Stock holding?
What to do with PPF and Sukanya Samriddhi Account?

I solved his confusion by answering his questions. If you are also leaving India, it is better to complete certain important financial tasks before you board the plane and bid adieu to your loved ones. So, here is simple to do list for NRI leaving India.

Also Read – RNOR Status NRI can save Tax up to 3 Years

To do list for NRI before leaving India-Financial Checklist for NRI

Change Existing account to NRO account

As per RBI guideline, it is mandatory to convert your existing account to NRO, if you are planning to leave India or becoming NRI. So, the first task for you is to change your existing account to NRO account. NRO account is known as NonResident Ordinary account. You can only keep money earned in India in the rupee form in this account. NRO is like normal saving bank account only except resident status and tax treatment. Normal saving bank interest rate 4-6% is applicable on NRO account. However, Tax treatment of NRO account is different as TDS applicable in this account is 30.9%. Apart from this bank need to report all transaction detail of this account to RBI. The maximum limit of this account is 1 Million USD. The balances in NRO accounts cannot be repatriated without the prior approval of RBI.

In order to convert the status of your existing account to NRO account, you need to submit passport, visa proof, work permit and declaration letter to the bank. On submission of these documents, the bank will convert your bank account into NRO account. This change is also possible after you leave the country, however, you need to send a notarized copy of all the mentioned documents to the bank. This will be time-consuming and tedious exercise.

Also Read – NRI Guide for buying property in India

Open NRE Account

The second task you should do is to open NRE account. NRE account is known as Non Resident External Saving account. You can deposit your foreign income earned outside India in this account. The balance maintained in this account is in rupee form and it is freely repatriable. The interest income and balance of this account is exempted from the tax.

You can open NRE account by filling up form and submitting required documents including work permit or visa proof. You can also open this account at the later stage. However, it becomes difficult remotely to open this account. NRE account can be opened in the form of Saving, current, recurring or fixed deposit accounts.

Convert existing fixed deposit to NRO

Fixed deposit is one of the favorite investment options for the Indian and I am sure you must be having it. So, a task for you before leaving India is converting this fixed deposit to NRO. Some of the banks automatically convert existing fixed deposit to NRO once you submit a request for changing your saving bank account. However, for some banks, you need to apply separately to convert this fixed deposit to NRO. The interest rate applicable on NRO fixed deposit is kind of same but the interest earned will be taxed at 30.9%.

Close your Demat account and open PIS account

I am sure you must be holding stocks in your Demat account. So, next task for you is to close the Demat account and open PIS account (Portfolio Investment Scheme) because as per RBI NRI can invest in shares and convertible debentures of Indian companies listed on NSE/BSE under the Portfolio Investment Scheme (PIS) route only. Under PIS route, NRI is permitted to invest up to a maximum of 5% of the paid-up share capital of the Indian company.

If you are NRI you need to open PIS account linked with NRO or NRE account for trading in stock market. If you are holding share in Demat account after becoming NRI it is considered as illegal. You need to transfer your existing stocks into PIS account.

Also Read – Investment options available for NRIs in INDIA

Open PPF account and Close Sukanya Samriddhi Account

PPF and Sukanya Samriddhi Account are best small saving account for Indians. As per RBI, NRI cannot open PPF account. However, they can continue old PPF account. So next task for you is to open PPF account if you really want to take advantage of high-interest rate of PPF. Along with that if you are holding Sukanya Samriddhi Account time has come to close the account as NRI is not allowed to open or continue Sukanya Samriddhi Account.

Make Power of Attorney

Next task is to identify the most trusted person and make a power of attorney on his/her name. The power of attorney holder can do any financial transactions on behalf of you in your absence. He/she can operate your bank account, sell/purchase share, sell your property etc. So, it is advisable to choose the person carefully. As per me, you can select your close relative like mother, father, brother or sister for this.

There are two types of power of attorney (i) General power of attorney (ii) Specific power of attorney. Select one based on your requirement. It is good to consult a legal advisor for making PoA.

Internet Banking

If you have not taken Internet banking username and password, time has come to take it. Before leaving India you should contact your bank to avail this facility. This facility will allow you to operate and view a status of your account anywhere from the Internet.

Also Read – Health Insurance Plans for NRI in India

Change your Mobile Number in Bank

If you are going to discontinue your Indian number, it is good to change the mobile number mentioned in the bank account. This is required especially when you need to enter OTP (one-time password) for performing banking transaction as OTP is generated and sent to register mobile number only. You can give mobile number of your close relative or friend.

KYC Update for Mutual Funds

As per KYC norms of RBI, it is mandatory to inform status change or change of residence to respective authority. You should update your KYC status to continue your mutual fund investment, because once your saving bank account is converted in NRO/NRE account next ECS instruction for the SIP will be not executed if fresh KYC is not given. Even selling of fund is also not possible if KYC is not done. KYC also require IPV (in person verification) so it will be difficult to do KYC when you are not in India.

Term Plan

I am sure you must have purchased good term plan with sufficient coverage. However, if you have yet not purchase it next task for you is purchase a suitable term plan. In some country purchasing insurance policy might be costly. If you are already holding term plan or insurance policy, you should inform Insurer about your NRI status change.

Buy Health Insurance Policy

Health is wealth and you must protect your wealth i.e Health. If you have not purchased health insurance policy yet you must opt for suitable health insurance policy. Health insurance will help you to cover growing health care expenses. After becoming NRI, it will be a hassle for you to visit India for health checkup fulfilling a mandatory requirement for taking health insurance.

Also Read – 10 Tips to reduce Term Insurance Premium

Close your Home Loan or any other Loan

The next task for you before becoming NRI or leaving India is to close your home loan, personal loan, car loan etc. It is not like that you cannot keep loan pending once you become NRI, but if it is good to close the loan to avoid unnecessary hassle of documentation, NOC at the later stage.

Convert your documents in e-copy

Before leaving India it is a good idea to gather all your financial documents convert it in e-copy and store a password protected soft copy at a suitable place. This will help you in quickly locating the documents as and when required.

Joint Account Holder

It is advisable to keep one person as a joint account holder in the bank account. Your joint account holder can operate your bank account in your absence if required.

Close your Locker or add Joint holder

You must be holding a locker in the bank. So, next task for you before leaving India is to close your locker or add joint holder in the locker. You must be aware that It is mandatory for the holder to operate locker once in the six-month else bank has a right to break the locker. Once you become NRI it won’t be possible for you to operate locker every six months.

No Tax Due

You should make sure that there are no pending tax liabilities on your head. If you have any due on tax make sure you to clear it, in order to avoid hassle at later stage.

Exchange of Foreign currency

You will need foreign currency. So, next task for you is contact the bank or exchanger and convert the rupee you have in to suitable foreign currency. This will help you a lot at an initial stage.

Take suitable Credit Card

You should take a suitable credit card allowing international transactions. International credit cards are more secured as it is smart chip enabled. This credit card will bring additional helping hand at an initial stage.

This to do list is prepared based on research and experience I have. Hope this to do list for NRI will help you. If I missed anything do let me know by comment section so that it can be added.

5 Best Credit Cards for Shopping and Cashback

Credit Cards

Shitanshu Kapadia

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April 23, 2016

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Shopping using credit cards can give you multi-fold benefits like cashback, reward points, EMI option, free movie tickets, etc. Since most of our shopping is done using credit cards it makes sense to select the best credit card for shopping and cashback. If you are doing regular shopping using a credit card and willing to save more money here is a list of 5 best credit cards for shopping and cashback.

5 Best Credit Cards for Shopping and Cashback

SBI Simply Save card

SBI Simply Save card is one of the best credit cards for shopping offered by SBI bank.

You get a maximum surcharge waiver of up to ₹100 per statement cycle, on your SimplySAVE Advantage SBI Card
You can enjoy 10 Reward points per ₹150 spent on Dining, Movies, Grocery or Departmental store purchases. Earn 1 reward point for ₹100 spent on any other category.
You can redeem reward points against outstanding credit card balances or against gifts.
To avail fee reversal, you need to have spent ₹ 1,00,000 or more on your SimplySAVE Advantage SBI Card in the previous year

Also Read – Best Credit Cards in India – Review & Comparison

American Express Payback Credit Card

New American Express Payback Credit Card is the second number in the list of best credit cards for shopping and cashback.

American Express Payback Credit Card offers 2 payback points on every ₹100 spent. These points are not given on utility bill payments, Insurance premium payments, and fuel payments.
Gift vouchers worth ₹ 7,000 or ₹ 2,000 on spending Rs. 2.5 lacs or 1.25 Lac in a Cardmembership year.
You will get Flipkart voucher worth ₹ 750 on taking 3 transactions within 60 days of Cardmembership

ICICI Bank Platinum Chip Credit Card

ICICI Bank Platinum Chip Credit card is available with multifold shopping benefits to end customers.

ICICI Bank Platinum Chip Credit Card gives 2 Reward Points on every ₹ 100 spent for all retail purchases except fuel. You can redeem these points and avail attractive gift offers.
1% Fuel Surcharge Waiver on Fuel Transaction up to ₹4000.
ICICI Bank Platinum Chip card comes with an additional security microchip. This prevents you from fraud and duplication of cards.

Also Read – 5 Best Premium Credit Card in India

HDFC Moneyback Credit Card

HDFC Moneyback Credit Card offers the following benefits to the customer.

HDFC Moneyback credit card gives you 2 reward points for every ₹150 spent. You can get cashback against these reward points.
Online shopping will be more rewarding by using HDFC Moneyback Credit Card. You will get 2X Reward Points more reward points on every ₹150 spent on online purchases.
1% Fuel Surcharge waiver on fuel transactions (Minimum transaction of ₹400, Maximum transaction of ₹5,000
500 Cash Points (applicable only on payment of membership fee)

Citibank Reward Domestic Credit Card

Citibank Reward Domestic Credit card is one of the best credit cards for shopping and cashback. This card gives the following benefits to customers.

Citibank Reward Domestic Credit card offers 10 reward points for every ₹125 spent.
You can get a discount of 15% on selected restaurants.
Citibank Reward Domestic Credit card offers multiple offers including EMI payment at various places.

A credit card can be a great tool if used wisely. On the other hand, unwise usage leads to a huge financial burden. If you decide to use a credit card, remember a few tips given below for credit card usage.

Credit Card Usage Tips

Keep track of all your purchases. If possible, maintain all receipts of purchase.
Don’t get carried away by doing impulsive shopping.
Use the credit card for needs not wants.
Pay off your bill every month.
Never miss a credit card bill payment.
Use credit cards as a budgeting tool.
Take maximum benefit of rewards and cashback.
Use credit cards to improve your credit score.
If possible set up Auto Debit Facility
Don’t share your credit card information with anyone.

Remember the credit card market is highly competitive. Keep your eyes open and take credit card which offers maximum benefits to you.

Hope you liked this article. Do share these useful tips and information with your friends.