Who are Visa, MasterCard and AmEx, and what is their link with the card-issuers?
Every credit card transaction operates on a network. Card-issuing banks share the network. And when you use a credit card, issued by any bank, the transaction is put through on these networks. Visa, MasterCard and AmEx are the big three.

In India, 23 banks are on the Visa and MasterCard loops. AmEx's is a proprietary network and is used only to issue AmEx cards.

What is the difference between a credit card, a charge card and a debit card?
A credit card allows you to pay for a service or product over a period of time. The first 45-50 days of credit (calculated from the date of last billing, and not date of purchase) come interest-free.

You can choose to pay your entire dues in one shot, or stagger them after paying a minimum amount every month. But if you choose the latter option, you have to pay a heavy interest.

Interest rates are usually steep -- starting from a minimum of two per cent per month (24 per cent per annum) to three per cent (36 per cent per annum).

With a charge card you have to pay the full bill within the credit period. You cannot carry over any balances like a credit card. However, you can choose to use a credit card like a charge card and pay up fully. This way you enjoy both interest-free credit and avoid getting yourself into a sticky situation.

A debit card enables you to access your bank deposit for payments. If you were to spend Rs 100, the amount is deducted from your bank account on a real-time basis. Simply put, a debit card is a deposit-access mechanism.

Debit-cards have just made a beginning in India with MasterCard.

What is a global card?
A global card enables you to use your credit card when you travel overseas. You can spend in dollars or any other currency, come back and then settle the dues in rupees.

Your credit-limit is based on the basic travel quota (BTQ) entitlement, and if this is more than your assessed credit limit, you have to buy travellers cheques. The exchange control regulations still apply, and you still have to get your passport endorsed for the amount spent.

What are corporate cards, co-branded and affinity cards?
A corporate card is targeted at business executives and takes care of their travel and entertainment spends.

It enables business travellers to segregate their personal and corporate expenditures. The monthly bills are paid directly by the company. If you overspend, your company may recover the excess from your pay packet.

Co-branded cards bring you the best of both worlds: the benefits of a credit card and special benefits on another brand or service provider.

Some examples of co-branded cards are HSBC-Shoppers' Stop or StanChart-Thomas Cook global card and the Timescard. An affinity card is aimed at emotions. The idea is to get you hooked on. For example, Stanchart with Mayo College.

How does a credit card work?
Your credit card is either on the Visa, MasterCard or AmEx networks. Irrespective of who issues your card, you can make a purchase from any establishment if you have a card with either a Visa or Mastercard logo. The merchant swipes the card through a terminal.

The details of your card on the magnetic strip are read by the terminal and the deal is put through. In less than a second, the terminal reads your credit limit, outstandings, the issuing bank's identity and clears the transaction. (For further details, refer to story and chart on merchant outlets).

Why should you take a credit card?
It is safer than carrying cash. You can spend anywhere, anytime. Nowadays, you can also issue cheques against your card limits and order drafts over the phone, not to mention access your ATM. Soon, you may be able to pay your telephone, electricity and grocery bills too.

A credit card also enables you to other benefits like discounts at shops and restaurants, airline tickets and insurance cover. Most credit cards also offer free personal accident cover. You get interest-free money for at least 45 days. A global card assures you of spending in any currency, and settling dues in rupees.

What if I lose my credit card?
If that happens, inform your bank immediately. For that, you got to remember your card number and the issuing bank’s name. You are protected from settling any spend done on your card the moment you inform the bank.

What should I do to protect my credit card?
Check your name on the card the moment you get your card, note down the card number and sign below the magnetic strip. Never disclose your card number or leave your cards unsigned. It can be abused.