Bank Theory

Credit and Debit Cards - Types, Examples, MCQs Credit and Debit Cards Payment cards are essential financial tools that allow users to make purchases or withdraw money. They are broadly classified into Credit Cards and Debit Cards, along with variants like Charge Cards, Prepaid Cards, Co-branded Cards, and Contactless Cards. Types of Cards Credit Card: A card allowing users to borrow funds up to a preset limit to pay for purchases or withdraw cash, with repayment typically due monthly. Charge Card: Similar to a credit card but requires the entire balance to be paid off every month. No revolving credit. Prepaid Card: A card preloaded with money by the user; it is not linked to a bank account. Debit Card: A card linked directly to a bank account. Funds are debited in real-time during purchases. Co-branded Card: A card issued by a bank in association with a retail partner or brand, offering special rewards or benefi...

Credit Cards and Loans - Bank Theory Credit Cards, Home Loans, Personal Loans, and Consumer Loans Credit Cards A credit card is a financial product that allows the cardholder to borrow funds up to a pre-approved limit to make purchases or withdraw cash. Interest is charged on the outstanding balance if it is not paid within the due date. Example: If a customer has a credit card with a ₹50,000 limit and makes a purchase worth ₹10,000, they will have ₹40,000 of credit remaining. Mathematical Illustration: Outstanding Balance = ₹10,000 Annual Interest Rate = 36% Monthly Interest = 36% / 12 = 3% Interest for 1 month = ₹10,000 × 3% = ₹300 Home Loans Home loans are long-term loans provided by banks or financial institutions to purchase, build, or renovate a home. They are usually secured by the property itself. Exampl...