ICICI Bank Changes

ICICI Bank, one of the leading private sector banks in India, has revised the terms of its credit cards, effective November 15. Notable changes include:

• No Rewards on Government Transactions: Cardholders will no longer earn rewards when using their cards for government-related transactions.
• Limited Fuel Rewards: The exemption on fuel surcharges has been capped at ₹1 lakh per month, beyond which the surcharge will apply.
• Removal of Spa Access Card: The Dream Folks card, which offered spa access, has been discontinued.
• Utility Transaction Fee: A 1% fee will be imposed on utility transactions exceeding ₹50,000 per month, and fuel transactions over ₹10,000 will incur the same fee.

State Bank of India Updates

SBI has also announced significant changes, set to take effect on November 1, impacting various aspects of credit card usage:

• Increased Finance Charges: The finance charges on all credit cards will rise to 3.75%, up from the current 3.50%. This increase excludes accounts for defense personnel.
• Utility Payment Charges: Starting December 1, if utility payments surpass ₹50,000 per month, cardholders will incur a 1% charge on these payments. This includes telephone, mobile, electricity bills, and insurance premiums.

HDFC Bank Revisions

HDFC Bank has implemented updates to its loyalty program for certain credit cards, effective from October 1. Key changes include:

• Reward Points Limitations: Redemption of reward points for Apple products will now be limited to one transaction per calendar quarter.
• Tanishq Voucher Redemption: The redemption of reward points for Tanishq vouchers has been restricted to a maximum of 50,000 points per quarter.

Conclusion

As credit card usage continues to rise, it’s crucial for cardholders to stay updated on the terms and conditions set by their banks. Understanding these changes can help consumers avoid unexpected fees and maximize the benefits of their credit cards. Be sure to review your bank’s policies regularly to ensure you’re making the most of your financial tools.

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Why Multiple Cards?

Credit cards are useful for various reasons, from shopping to fuel rewards. Different banks and credit card issuers offer a variety of benefits, such as discounts, cashback, and rewards points. For example, some cards provide discounts on specific types of purchases, while others offer travel perks. As long as you pay off your balance each month, these rewards can add up, making it worthwhile to keep several cards active.

Points to Consider with Multiple Credit Cards

However, holding more than one credit card requires mindful management to avoid overutilization and missed payments, which can impact your credit score.

1. Credit Utilization Ratio (CUR):

The CUR is the percentage of your available credit that you’re using, which is crucial for your credit score. A CUR above 30% can negatively impact your credit rating, so having multiple cards can help spread out spending. For instance, if you have a credit limit of ₹1 lakh on one card and ₹2 lakhs on another, you shouldn’t exceed ₹30,000 on the first and ₹60,000 on the second. If you cancel one card, your CUR may increase, especially if you rely on one card for all your expenses.

2. Credit Score Considerations:

A good credit score is essential for securing loans and favorable interest rates. The utilization ratio and timely payments significantly impact your score. Keeping more than one card can help you maintain a lower CUR, thereby positively influencing your score and loan eligibility.

3. Maximizing Rewards:

Each credit card offers unique rewards and benefits. By holding multiple cards, you can take advantage of a broader range of deals, from cashback on groceries to discounts on flights. If you frequently shop online or travel, the rewards from multiple cards can save you money and provide additional perks.

When to Consider Canceling a Card

If you’re thinking about canceling a card, evaluate each card’s annual fees, credit limit, and the rewards it offers. Consider canceling cards with high fees or those you rarely use. However, be cautious of how it impacts your credit score. Canceling a card reduces your overall credit limit, which can increase your CUR if your spending remains the same. Always ensure that any cancellation doesn’t negatively affect your score or financial standing.

Final Thoughts

Credit cards are powerful financial tools when used responsibly. With multiple cards, you can access a wider range of rewards and maintain a healthier CUR, but it also requires careful management. Make sure to review the benefits and costs associated with each card regularly, and always keep your spending within limits. With responsible management, having multiple credit cards can enhance your financial flexibility and offer significant perks.

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