Key Components of a Credit Card

1️⃣ Credit Limit

• The maximum amount a bank allows you to spend
• Fixed by the bank based on income and credit history
• Example: If credit limit = ₹50,000, you cannot spend more than this

2️⃣ Billing Cycle

• The time period during which your card transactions are recorded
• Usually 30 days
• All purchases made in this period appear in one bill

Example:
1st March to 30th March

3️⃣ Statement Date

• The date on which the bank generates your bill
• Shows total amount spent, minimum amount due, and due date
• Marks the end of the billing cycle

4️⃣ Due Date

• The last date to pay the bill
• Missing this date leads to late fees and interest
• Usually 15–20 days after the statement date

5️⃣ Payment Grace Period

• The interest-free period given by the bank
• Starts after the purchase date and ends on the due date
• No interest charged if full payment is made within this period

Example:
Purchase on 5th March → Pay by 25th April → No interest