Credit Card Rules: Understanding Your Financial Responsibilities:

Credit Card Rules: The number of credit card users has grown rapidly over the past few years. For now, people regard spending on credit cards and getting it done via EMI as a point of prestige. At times of need, credit cards can also be leveraged as a short term loan. The loan can be repaid without incurring interest during the grace period. However, if you exceed the grace period without payment, you will owe a great deal of interest on the loan.

People started using credit cards more frequently.

A credit card comes loaded with various types of reward points such as cash back, discounts, and many more. This is one of the reasons as to why people started using credit cards more frequently. The cash loan given ot a credit card is considered as an unsecured loan. It is called an unsecured loan since there is no requirement to put them on offer in order to obtain fund. On the contrary, a loan of this sort secured against a domicile or an automobile is referred to as a secured loan. But, if he in fact takes the loan, pays the money then dies with a loan still on the perch they’re holding, then who would the financial institution sue for retrieving the money. What’s the norm that governs this, let’s find out

Here is the policy concerning an unsecured credit card.

An individual needs to follow certain norms if he/she owns a credit card with no collateral. Typically, the amount of money you will be given access to depends on your income. It also depends on your employment record in the previous loan repayment and current debt. So, any expenditure that is done through the credit card, payment liability remains with the card holder himself. However, in case the card holder passes away without clearing the debt, then the bank will write off the remaining amount. In such a case, no family member can be compelled to pay off that debt.

What is the policy on secured credit cards?

There has been a surge in the market for credit cards that require some type of collateral. This kind of credit card is usually offered to individuals who do not qualify for a standard credit card. For this type of a credit card, you need to make a deposit with the bank that will be held as a fixed deposit. In case the user of this credit card explodes an option that is so extreme and figuratively speaking off the rails, then the bank has every right to recoup their dues by liquidating the user’s fixed deposit.

What happens in the event of death of the borrower while repaying a personal loan?

It is a none secured personal loan since it is extended by the bank without any backing collateral. So along with resulting in the issuance of a credit card, the liability of repayment also gets passed on to the borrower in the case of a personal loan. If for any reason the borrower is required to pass away during the repayment cycle, there is no way the bank can compel any descendant kith and kin to shell out money on his behalf. The termination of life also gives liberation from all obligations, so in this scenario the loan ceases to exist along with life.