Rising consumerism, booming e-commerce and lifestyle choices have positioned credit cards as a great tool for making seamless purchases while helping keep track of such expenses. Especially for the young adults as they get gainfully employed and look for electronic mode of making payments.

Credit cards have more to offer than simply being means of making payments. Regular use and good repayment track record help build good credit scores, which, in turn, allow customers to get loans in future.

So how do you get started and what is it that you need to know while making the right choice for your first credit card? Broadly four things can help:

Savings from product features and benefits:
A good credit card offers multiple savings avenues. So first-time applicants should look at interest-free period, quality of reward point program in terms of points earned per Rs 100 spent and its rupee value on redemption. It is important that the bank offers points that never expire else you stand to lose value in the event of non-redemption on a future date. Perks like cash-back, discounts on movie bookings and dining and offers with large retail, e-commerce or travel companies or fuel surcharge waiver across all fuel stations offer strong value on card usage. Looking for cards with lowest interest rate can make a big difference to interest cost savings in case of revolving balances. Applicants must look at the total annual savings that the card delivers while making a decision.

Convenience:
Features like complementary domestic or international airport lounge access are big on convenience during travel without having to wait at airport lobbies. Ease of making payment is another consideration. Hence, having multiple payment modes like internet and mobile banking, NEFT transfer, ATM, cheque and direct debit to bank account among others is important. Cards which offer wide merchant acceptance both in India and overseas ensure limited dependence on cash. With the advent of NFC technology, contact-less cards are a secure way of making payments without the card leaving your hand. This is helpful while making convenient payments at quick-service restaurants, fuel stations or for grocery shopping at hypermarkets for a quick check out experience.

Customer service: This is the holy grail of a good usage experience. Hence, availability of multiple and seamless channels of service without any restrictions is a critical determinant. It is important to have 24*7 services through phone and other communication channels like email or SMS. Self-service channels like internet banking or bank’s mobile app are helpful while making payments or in emergencies like blocking a lost/stolen card. Banks also offer dedicated lines to ensure timely and responsive services.

Knowing the terms and conditions of card usage:
This includes knowing if the card comes with any joining or annual fee and benefits linked to the fee; for example, welcome reward points or waiver of annual fee against minimum annual spends, interest rate on revolving credit or foreign currency mark-up on overseas purchases. Understanding how total and minimum amount dues are calculated helps in making payments, in building good credit behavior and avoidance of any charges like late payment charges.

The writer is senior group president, retail and business banking, YES Bank

Source : DNA Published Date: Sep 20, 2016
It’s not mandatory to register a will, but if any asset is to be given away to charity, then it has to be registered

While most individuals save and look for the right investment products to create long-term wealth, it is equally important to write a will to bequeath the legacy to the loved ones. A will, that lists all move-able and immovable assets, will ensure that your assets will be handed over to the identified beneficiary. A will comes into operation only after the death of the testator.

When to write a will
First and foremost, an individual has to be of sound mind to make a will. The document has to be signed and two people have to witness it. It can be revoked by the testator any time during his lifetime as long as he is competent enough to make such a change. In case of execution of any subsequent will, the previous version will be cancelled. A will can be handwritten or typed out and no stamp paper is necessary. One should consult a trusted lawyer before preparing a will. It is not mandatory to register a will but in case any property or asset is to be given to a charitable organisation, then registration should be done.

Types of will
A will, which is written by an individual other than a defence personnel, is called an unprivileged will. All unprivileged wills have to be signed by the person who is making the will in the presence of at least two witnesses. In case of a conditional will, one can put down certain conditions and it will become valid if all the conditions outlined are fulfilled. A joint will is written by more than one person and the surviving testator can revoke the will even after the death of the other. The order of preference to distribute property to legatees are spouse, children, brothers or sisters and other relatives. If there is any addition to the family or a key legatee is added after the will is made, then one must change the will.

Making it operative
On death of the testator, a probate has to be issued from a court of competent jurisdiction (if the property is in Chennai, Mumbai or Kolkata) to make the will operative. When a person dies without a will, he is said to die intestate. In such cases, based on the religion of the intestate person, the estate will be distributed. Also, if a will is not signed, the legal heirs of the assets will be decided as per the succession laws of the country and the legal heirs will have to give affidavits stating that the nominee mentioned in the financial products will get all the proceeds of the deceased.

Nomination not enough
Diligently filling up the nomination form in insurance policies, share certificates, mutual funds, bank deposits and other financial products does not necessarily mean that the nominee will get the money easily on death of the owner. A nominee is merely a trustee who is only the caretaker of the money or financial asset. For the nominee to get the money easily, the owner of the asset has to write a will and only then the nominee will become the legal heir.

Source: The Financial Express
For a home loan, an individual’s ability to get a loan is limited by his income and credit score. But when he pairs with another individual such as a parent, child, spouse or sibling, together they can together raise a higher loan limit.

Who can co-borrow
Husbands and wives are the most commonly seen combination for co-borrowing. Fathers and sons can co-borrow but in case of a loan taken between a father with more than one son, the father will have to be the owner of the property. Between a father and unmarried daughter, the daughter needs to be the owner to avoid post-marriage disputes. Between a father, son and daughter, the daughter may have to relinquish her claim on the property. Brothers can jointly apply if they are living together and intend to continue living together. But brothers and sisters, or sister and sister, cannot be co-applicants—nor can a minor be a co-applicant. Also, parents can’t co-apply with a married daughter. If the co-borrowers are parent and child, the banks usually do not allow a tenure overlapping the post-retirement phase of the parent.

How does it help
Co-borrowing helps increase your loan eligibility. Suppose your income allows you to take a loan of R70 lakh, but your loan requirement is R1 crore. Here, a co-borrower could stretch his eligibility to take a bigger loan. In a co-borrowed loan, the repayment capabilities of all applicants are considered collectively to determine the maximum loan eligibility. If one applicant is falling short of the eligibility, a co-borrower could improve their chances of getting the loan. Similarly, if a person has a credit score lower than the bank’s requirements, a co-borrower could improve their chances of getting a loan.

Tax benefits
When a home loan is co-borrowed, each borrower is eligible for tax benefits under Section 24 for payment of the interest and for payment of the principal under Section 80(C). The tax benefit is allowed in the proportion as per mentioned share of each applicant in the loan agreement, provided the co-borrowers are also the co-owners of the property. The tax benefits are allowed only once the possession of the property has been passed on to the buyer.

The flipside
Be aware of the terms and conditions of joint borrowing before you sign a loan agreement. In a situation where a co-borrower is not able to repay his or her share of the equated monthly instalments (EMIs), the lender may reserve the right to recover the money from the co-borrower. The co-borrower also acts as a guarantor, therefore a default by one borrower could damage the creditworthiness of the other. Another problem that may crop up is when there’s a dispute among the co-borrowers, especially in the absence of a will and if there are too many legal heirs with claim on a property.

Source: The Financial Express
The author is CEO, BankBazaar.com
If you are planning a shopping binge this festive season—online or offline—make sure you don't fall prey to these retailer tricks.

Decoy Pricing This tactic is used by many stores. If a product worth Rs 1,000 is placed next to those worth Rs 500 and Rs 1,100, you are likely to pick the Rs 1,000 product and think of it as a good deal. It's a diversion to make the costly items seem economical. It's also used in restaurants, where menus list highcost items next to cheaper ones.

Open the Wallet At the checkout counter, have you noticed small items like low-priced wallets, accessories, snacks and chocolates? They are there for a reason. After an exhaustive shopping session, you are an easy prey with little self-control. So you will easily succumb to chocolates and small items.

Gruen Transfer If you feel lost in big stores, it's intentional. Named after mall architect Victor Gruen, the term refers to building designs that confuse shoppers and make them spend more time so that they make impulse buys. Crossing the same spot again also makes you less price-sensitive due to the false feeling of price familiarity.

Bag Snare Have you wondered why you are instantly handed a carry bag in a clothes chain or a supermarket? One, if you have to hold stuff in your hand, you are likely to buy fewer things. Two, they play on your loss aversion bias, which means that the longer you have the thing in your possession, the more the sense of loss while parting with it. So ditch that bag.

Denomination Effect This cognitive bias is exploited freely by shops. It makes a person less willing to use a higher denomination note than a lower one. So while you are unlikely to buy a big shampoo bottle worth Rs 400, you won't mind spending Rs 100 on a smaller one. The shops display more such items. This is also why you buy a Rs 10 candy at the cash counter.

Dynamic Pricing Most online retailers use this trick, offering different prices to different customers as per demand. This means that if you have been on a website for long, you may be offered a higher price as opposed to one who has stayed for a very short period. This is because the user's browsing and spending patterns can be tracked by online retailers. To avoid it, browse incognito, erase cookies and log out of your account.

Eyelevel Products It may not have struck you, but the products that are at eye level are typically costlier and more profitable than the ones on the bottom rack or higher up. Similarly, toys, games and other stuff for children will be placed at lower level as per the kids' ages and heights. The stores also tend to move customers from right to left because most people are right-handed and find it easier to grab stuff as they go past aisles.

Essential Items at the end Essential food items are typically placed at the end of a grocery store or supermarket so that you are forced to cross the aisles loaded with other, attractive stuff. So, even if you had no intention of picking the items and these were not present in your shopping list, you will be tempted to buy, and most often do.

Discount Traps 'Buy one, get second at 50%' or 'Buy one, get one free' don't make for good offers. The first one is only providing a 25% discount on each item. In the latter, the price may cover both items. Online sales may also offer discounts with limited validity or on the next purchase. Small Packages Sell Big If you think you are saving money by buying items that come in packs, say, a six-pack of juice cartons or probiotic packs, think again. Research shows that you invariably end up consuming more over time, a smart way to make you spend more each time. So unless you are entertaining or planning a trip, try not to go in for the 'economical' packs.

Free Samples The free sample stations strategically placed in malls and grocery stores are not just a marketing strategy for a new product or eatable, but are also intended to make you linger around and buy other items placed in the area or aisles positioned next to these stations.

Mesh Bags Costlier Did you think the vegetables packed in mesh bags were for your ease of picking and carrying? Not always. They are costlier than loose items, and may also be a mix of good and damaged items. So it may be more cost-effective to spend five more minutes and pick the vegetables by hand.

Downloading Apps How many e-commerce apps have you downloaded on your phone? Even if you are not an avid shopper, you may succumb to regular alerts and messages of early-bird notices and buy things just because they are on sale or make impulse purchases for items that you don't really need.

Forced Urgency If you have tried to book a hotel via an aggregator, you are likely to have come across pop-ups that tells you '11 people are checking this hotel' or 'Only 2 rooms left on this site'. Similarly, many online and offline sales flash 'Last few days' or 'Only 5 items left' signs to force you to take action and loosen your purse strings.
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