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Getting a Credit Card

Rahul applies for his first credit card, learning about the credit limit, billing cycle, and the importance of paying on time.

Rahul, Bank representative

Key words and phrases

credit carda card that lets you borrow money to make purchasesHe used his credit card to book the flight tickets.
credit limitthe maximum amount you can spend on a credit cardHis credit limit is one lakh rupees.
billing cyclethe period between two credit card statementsThe billing cycle runs from the first to the last day of the month.
due datethe date by which the bill must be paidAlways pay before the due date to avoid charges.
minimum duethe smallest amount you must pay to avoid a penaltyPaying only the minimum due adds interest charges.
late payment feea charge for paying after the due dateHe was charged a late payment fee once.
rewards pointspoints earned on spending that can be redeemed laterHe redeemed his rewards points for a gift voucher.
statementa monthly summary of transactions on the cardCheck your statement carefully every month.
annual feea yearly charge for owning a credit cardThis card has no annual fee for the first year.
swipeto use a card by passing it through a machineHe swiped his card to pay the bill.
cashbacka small percentage of money returned on purchasesThis card gives five percent cashback on groceries.
EMI conversionturning a large purchase into fixed monthly instalmentsHe converted his phone purchase into EMI conversion.
foreign transaction feea charge applied when using the card abroadCheck the foreign transaction fee before travelling.
contactless paymentpaying by tapping the card near a machine, without swipingHe used contactless payment at the coffee shop.
PINa secret number used to authorise card transactionsNever share your card PIN with anyone.
chargebacka refund reversal disputed by the cardholderShe requested a chargeback for the faulty item.
fraud alerta warning message about suspicious card activityThe bank sent a fraud alert about an unusual transaction.
card activationthe process of enabling a new card for useCard activation takes just a few minutes online.
grace periodthe interest-free time between purchase and due dateThe grace period on this card is up to fifty days.
outstanding balancethe amount still owed on the cardClear your outstanding balance to avoid interest.

Useful sentences

Dialogue

RahulI'd like to apply for my first credit card.

Bank RepresentativeSure, based on your salary, your credit limit will be one lakh rupees.

RahulWhat happens if I miss the due date?

Bank RepresentativeYou'll be charged a late payment fee and interest.

RahulI'll make sure to pay the full amount every month.

Bank RepresentativeGood habit. You'll also earn rewards points on your spending.

RahulHow do I activate the card once it arrives?

Bank RepresentativeCard activation only takes a few minutes through our app.

RahulWill I get a fraud alert if something suspicious happens?

Bank RepresentativeYes, we'll notify you instantly by SMS and email.

Common mistakes

Quick quiz

1. What is a "billing cycle"?

2. A charge for paying after the due date is called a ___.

3. Complete: "He ___ his card to pay the bill."

4. What is "contactless payment"?

5. What is the "grace period" on a credit card?

6. What should you do if you get a fraud alert?

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