Know the Benefits of Prepaid Credit Cards and How to Choose the Right One

Financial institutions like banks offer prepaid credit cards to help you go cashless without being exposed to any debt. Unlike regular credit cards, prepaid cards require you to transfer funds into the card account before you can begin using them. You can then pay online or offline until your balance is exhausted. 

One of the significant factors differentiating prepaid credit cards from regular cards is that you are not borrowing any funds from the bank. So, if you are new to credit and cannot get a regular credit card, you can opt for the prepaid version instead. 

Prepaid credit cards also come in handy for students who have little experience in handling credit. Read on to learn what are prepaid credit cards, their benefits and more.  

How Do Prepaid Credit Cards Work?

Using a prepaid credit card, meaning a credit card that allows you to transact based on the funds you have loaded in your account, has many advantages. Before you delve into those, keep in mind that these cards work like debit or gift cards. This means that you can make purchases or other transactions until you exhaust the amount you have added.  

There’s no need to stress when you reach the limit as you can reload your card with an additional amount. This way, you can set a monthly budget and plan your finances better. 

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Features of Prepaid Credit Cards

Here are a few standout features of prepaid credit cards:

  • Help you avoid debt as you don’t need to borrow funds from the card issuer
  • Can reload your card when you need to or once you exhaust the amount
  • No credit score check is required to get these cards
  • Can make purchases based on a fixed limit as set by the issuer
  • Zero overdraft fees and interest levied as you aren’t borrowing funds
  • Allows you to earn cashback and rewards based on the benefits offered by issuers

Types of Prepaid Credit Cards

There are various kinds of credit cards that you can choose from based on your requirements. See the most common types here: 

  • Open Loop Prepaid Credit Card

This type of credit card is affiliated with a payment network and carries the affiliate’s brand logo. These cards are usually accepted by a majority of merchants, so you can use it freely. Also referred to as open system cards, these cards may have affiliation with either Visa, MasterCard or American Express.

  • Closed Loop Prepaid Credit Card

Unlike open loop cards, these cards will be accepted only at affiliated merchant outlets.

  • Reloadable Prepaid Credit Card

Most prepaid credit cards in India are reloadable, where you can add funds once you exhaust the amount. 

  • Non-Reloadable Prepaid Credit Card 

As the name implies, you cannot reload the card once you have used the funds. A classic example of these cards is gift cards. 

Limitations of Prepaid Credit Cards

Here are some drawbacks of using these cards:

  • Using this card is not possible if you haven’t loaded funds onto it 
  • These cards are not as secure as regular credit cards 
  • Additional charges, such as monthly maintenance fees, activation charges, etc., are usually levied
  • Cannot help you build your credit score as they are not a form of credit

Studying the pros and cons can be helpful in determining whether or not to get a prepaid credit card. If you want to build your credit history and enjoy a bevy of perks, opt for the Fibe Axis Bank Credit Card. This is a numberless credit card that links to your UPI ID, so it gives better security against credit card fraud and identity theft. 

Moreover, you can get up to 3% cashback on your transactions, free access to domestic airport lounges, and dining discount at partner restaurants! Download the Fibe Personal Loan  App or register on our website to get the Fibe Axis Bank Credit Card today.

FAQs on Prepaid Credit Cards

What is a prepaid credit card and how does it work?

A prepaid credit card is a type of card that requires you to add funds to make purchases or execute transactions. It works like a debit or gift card, where you can load a specific amount and use the same to transact until you exhaust it.

What is a prepaid credit card example? 

Here are a few examples of prepaid credit cards in India: 

  • Axis Bank Smart Pay Card
  • HDFC Bank ForexPlus Chip Card
  • HDFC Bank GiftPlus Card
  • HDFC Bank MoneyPlus Card
  • State Bank Xpress Money Card

What are the disadvantages of a prepaid credit card?

Here are some of the drawbacks you can keep in mind:

  • You may have to pay several fees and charges when you use a prepaid credit card. 
  • This card also does not help you boost your credit score. 
  • You can use it only when you load the card with funds and cannot get access to credit.

Virtual Credit Cards: Features, Benefits, & How to Them

Virtual credit cards (VCCs) are digital copies of regular credit cards offered by issuers upon your request. These cards help protect your card details, especially when making online transactions. This is especially important in recent times due to the increase in fraud, hacking and fake websites impersonating genuine e-commerce platforms. 

When you generate a virtual credit card, you get temporary card data from your credit card company, which is similar to your primary card. This includes the:

  • Credit card number 
  • Expiry date
  • CVV number

This helps ensure that your details do not land in the wrong hands. 

Learn more about the features, benefits and how to apply for a virtual credit card.  

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Features of a Virtual Credit Card

Here are some features of virtual credit cards in India that make them a smart choice: 

  • Offers High Security

The main feature of virtual credit cards is that they help protect your data from fraudsters. These cards come with alternate details that are valid for a limited time, which allows you to shop without the risk of data breaches from an insecure network connection.

  • Comes With a Set Limit

Once your request for a VCC gets approved, issuers generate card data valid for up to 48 hours. Moreover, the card has a set credit limit that you can utilise multiple times for a limited period. 

  • Provides Instant Protection 

Primary cardholders can request an instant VCC before making an online transaction. Furthermore, if you suspect any suspicious activity, you can instantly block your VCC.

  • Requires No Additional Charges

Cardholders do not have to pay any extra fees or charges for this facility, which makes this card more wallet-friendly!

  • Helps Track Your Transactions 

All the transactions made via virtual credit cards show up on the account statement, similarly to any other transaction you make using your credit card.

Benefits of Using a Virtual Credit Card

Keeping their features in mind, here are some benefits of getting virtual credit cards in India:

  • Applying for a virtual credit card is quick and easy
  • You can get instant protection from fraud 
  • There are no additional costs that apply 
  • Once the card expires, your unutilised credit limit gets transferred to the physical card
  • This facility is available for all international and national transactions 

Also Read: Benefits of credit card

Precautions to Take Before Getting a Virtual Credit Card

Here are some drawbacks you must consider before you generate a virtual credit card. 

  • You cannot apply for a VCC if you are not the primary cardholder
  • You must have a physical credit card to generate a VCC
  • These cards cannot be used for physical transactions at stores and outlets using a POS but may be used only online
  • They have limited usage and validity 
  • You cannot withdraw cash from your VCC limit
  • Once your card has expired, getting a refund may be difficult

How to Apply for a Virtual Credit Card

Now that you know its pros and cons, here’s how you can generate a virtual credit card.

Step 1: Log into your credit card issuer’s website
Step 2: Go to the virtual credit card option
Step 3: Fill in the application with your credit card details
Step 4: Enter the OTP to authenticate the request
Step 5: Get instant approval
Step 6: Submit your KYC document

With these steps, you can easily apply for a virtual credit card and make payments safely. You can also opt for entirely virtual credit cards, like the Fibe Axis Bank Credit Card. This is India’s first numberless credit card, which helps keep all your credit card details private and offers better protection. 

Moreover, you can link this RuPay card with UPI applications and make seamless payments. You can also enjoy up to 3% cashback on every transaction and access many other exciting benefits. Download the Fibe Instant Loan App on your device or register on our website to apply for this lifetime-free credit card! 

FAQs on Virtual Credit Cards

What is a virtual card and how does it work? 

An add-on facility you can get when you have a physical credit card, a virtual credit card helps make digital payments safer. When you generate a virtual credit card, issuers give you alternative card details to use to mitigate fraud when paying online. 

Are virtual credit cards a good idea? 

For security and protection against fraudsters and identity thieves, you can apply for a virtual credit card. 

What is the difference between a virtual credit card and a credit card?

You can use your regular credit card for both online and offline payments. However, virtual credit cards are only valid when you’re transacting digitally. Moreover, they are available with a set credit limit for a limited time.

Credit Card Validation and Validators: What do you need to know?

Credit cards have become increasingly popular and therefore, credit card validation has become more pertinent than ever. The validation process helps ensure the card number is valid. While the process is complex, many online credit card validators make this easier, simpler and quicker. 

Read on to learn how credit card validators work, their importance, benefits and more.

What are Credit Card Validators?

These are tools that help verify the credit card number you provide. In simple terms, an online credit card validator checks whether your card number is valid. It evaluates this by assessing the format of your number and whether it fits the format used by the financial institution. 

Remember, credit card validation done by these tools is only for the card number. These tools do not help verify whether the card is authorised for transactions. Generally, online merchants use these tools to eliminate input errors from the user and ensure that the credit card number entered is structurally valid.

How do Credit Card Validators Work?

These tools carry out the credit card validation through an algorithm that verifies the information against predetermined criteria. The details that these validators check include the following:

  • Personal Account Number (PAN)
  • Issuer Identification Number (IIN)
  • Main Industry Identifier (MII)
  • Checksum
  • Luhn

You can also find different types of CC validators online that check the number’s validity through different algorithms and pieces of information. Here are some common tools you can find:

  • Issuer Identification Number (IIN) Validators

These check the first 4 to 6 digits of your card number, which also makes up the Bank Identification Number (BIN). The validator checks the number by comparing it against a database of valid IIN/BIN. 

  • Luhn Algorithm Validators

This is an online credit card validator that checks if the number provided by you is in a specific format or a pattern.

  • Card Verification Value (CVV) Validators

Validating credit card numbers through these tools entails verifying the 3 to 4 digits generally mentioned at the back of your card.

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How to Use Credit Card Validators

Validating credit card numbers through online validators is simple and requires only basic information. To use the tool, follow these steps:

  • Step 1: Open a CC validator online
  • Step 2: Enter your card number
  • Step 3: Click on the validate option
  • Step 4: Check the validity of your card

Remember, you are entering your credit card number online to use this tool. So, ensure that you choose a safe and credible program to protect your finances and information.

Benefits of Credit Card Validation

Using credit card validators has several benefits, from improving security to lowering failed transactions. Here is a glimpse into some of the top advantages of credit card validation:

  • Reduces Fraud

One of the most significant benefits of validating card numbers is eliminating fraud, as it helps ensure that the number entered matches the cardholder and issuer’s details.

  • Ensures Accuracy

Since these validators check the format of the number, it also aids in boosting the accuracy. If you enter a few numbers in the wrong order or miss out on entering some, you cannot proceed with the transaction. This also helps avoid failed transactions and enhances your experience.

  • Saves Cost

Since online CC validators ensure accuracy, they also help save costs you may incur as a chargeback or penalty in case of entering inaccurate information.

  • Improved Security

Once the merchant verifies the card number you enter, they prioritise ensuring the security of your information. As such, you can make safe transactions and keep your financial data protected.

When it comes to securing your finances from fraud, the type of credit card you choose also holds great importance. This is where the Fibe Axis Bank Credit Card comes into play. A numberless credit card that links to UPI helps eliminate the risks associated with stolen card numbers. 

Along with offering added security, the card has exciting benefits that make every payment rewarding. For instance, you can earn up to 3% cashback on your transactions via this card. You also benefit from seamless transactions as you can pay via UPI without hassles. Download the Fibe Personal App or register on the website to apply and get this credit card today!

FAQs on Credit Card Validation

What is the function of a card verifier?

Using a credit card verifier or validator helps check the card’s authenticity. Through these validators, the recipient of money can ensure that the card being used is valid.

Who verifies credit card information?

Several online credit card validators can help verify the card information. These validators are based on different algorithms and consider different parameters.

How do I check if a credit card is valid?

You can use a CC validator online to check if your card number is valid. These tools generally ask for your credit card number, so make sure you use a credible tool.

Loan on Credit Card: Now Get Instant Loan Against Credit Card

A credit card is a handy tool to fulfil your short-term goals with the help of a pre-approved credit limit. If you are in need of a higher amount to meet an emergency and need more time to repay it, you can opt for a loan on a credit card. 

Similar to other borrowing options, it credits your outstanding credit limit to your bank account, which you can repay in EMIs. To know more about getting a personal loan against credit cards, read on.

Know What is a Credit Card Loan

A credit card loan is a seamless and convenient option in case you need a higher amount quickly with less paperwork. You must be eligible for this type of loan and credit card companies provide it faster. It comes with flexible repayment terms and the amount depends on your unused credit card limit. 

How a Loan Against Credit Card Works

In case of urgent financial requirements for bigger amounts, you can opt for this loan through an easy and seamless facility. Repayment is easy via EMIs, which include the predetermined interest rate on credit card loans. This facility requires minimal to zero documentation because the card issuer already has your details. 

Hence, many such credit card offers are pre-approved, aiding in quick disbursal. The loan amount you receive is dependent on the unused limit of your credit card. With every repayment, your credit limit is restored, making it available for other transactions using the card. 

How to Apply for a Loan Against Credit Cards

Here are some steps to follow when you opt for a loan against your credit card:

  • Visit the official website of your credit card lender to check the eligibility criteria and your mobile app/online account for any pre-approved offers you may have 
  • Fill in the application form and submit the required documentation, if any
  • Choose a suitable repayment option and tenure 
  • Read the agreement carefully and sign the document before you proceed
  • After your application is approved, the loan amount will be credited to your bank account and you can withdraw amounts as per your needs

When you are applying for a credit card loan, be sure about the fees and applicable charges. Make sure you are aware of them all to avoid high interest dues or penalties.

Pros of Opting for a Loan Against Credit Cards

A personal loan against credit cards allows you to enjoy various advantages. Some of these benefits include the following:

  • Available Instantly

Many credit card issuers provide pre-approved offers of a loan against credit cards. This allows you to benefit from a quick disbursal, so you can meet emergencies easily. 

  • Minimal Documentation

Credit card providers have your personal and financial details, so they require less documentation.

  • Ample Loan Amount

While the loan amount depends on various factors, you can most likely get a higher amount if your available credit limit is higher.

  • Puts Credit Limit To Good Use

Opting for a loan against credit cards allows you to get a percentage of your unused credit limit as the loan amount.

  • Flexible Repayment Options

These loan offers also enable you to opt for convenient tenures. This way, you can repay across a course of time that works best as per your financial capabilities.

  • Lower Interest Rates

Compared to credit card interest rates, which can even reach up to 58% p.a., note that the interest rate on credit card loans is lower. So, choosing them can be a smart way to keep your borrowing costs low. 

  • No Need for Collateral

Depending upon the limit and type of credit card you have, this loan does not require you to risk any collateral. 

Who is Eligible to Get a Loan Against Credit Cards?

To get a loan against your credit card, the eligibility depends upon your lender and the type of credit card you have. You usually need to fulfil certain conditions to qualify, including the following:

  • Your credit card account must be active 
  • It must be in good standing
  • The card must have enough unutilised credit limit to cover the entire loan amount
  • You must have a stable income source with a good credit score
  • Your age must be over 18 years, as you can’t get a loan on an add-on credit card

If you want a higher loan amount with a reasonable repayment option, consider Fibe’s Instant Cash Loans of up to ₹5 lakhs. Along with a simple application process, you can get affordable interest rates with less documentation. Download the Fibe Personal Loan App to get funds and fulfil your financial needs immediately!

FAQs on Loan Against a Credit Card

Is it possible to opt for a loan on a credit card?

Yes, many lenders allow credit cardholders to apply for a loan against credit cards. You can contact your credit card issuer to inquire if they offer such a facility.

How good is a loan on a credit card?

With a loan on a credit card, you can enjoy instant approval, quick disbursal, easy repayment options and ample funding based on your unutilised credit limit.

Fibe Axis Bank Credit Card vs Traditional Credit Card: All You Need to Know

The newly launched Fibe Credit Card is a co-branded card launched in collaboration with Axis Bank and comes with attractive features and benefits. With it, you can make every transaction more convenient and rewarding. 

One of its many standout features compared to traditional credit cards is that you can link this numberless RuPay credit card with third-party UPI applications. This facilitates quick and hassle-free online payments. 

To know more about how the Fibe Axis Bank Credit Card differs from traditional credit cards, read on.  

Fibe Axis Bank Credit Card VS. Traditional Credit Card

Note these differences between the Fibe Axis Bank Credit Card and traditional credit cards to choose the ideal one for yourself. 

ParticularsFibe Axis Bank Credit CardTraditional Credit Card
Offers and Rewards3% Cashback on every transaction1% Fuel surcharge waiver up to ₹400 per month4 Complimentary domestic airport visitsVaries depending on the credit card you choose
Fees and ChargesNo joining and annual feesMost credit cards come with joining and annual fees
UPI Linkage Since it is a RuPay credit card, you can link it with a UPI app to make quick and safe online paymentsMost traditional credit cards can’t be linked with a UPI application unless they are RuPay cards

How to Link the Fibe Axis Bank Credit Card with UPI?

In June 2022, the Reserve Bank of India (RBI) allowed RuPay credit cardholders to link their card with UPI applications. Here are the steps you need to follow to link the Fibe Axis Bank Credit Card with the UPI:

  • Step 1: Download and open the UPI application on your smartphone and select the ‘Add/Link Credit Card’ option
  • Step 2: Select the issuing bank, i.e., Axis Bank in this case 
  • Step 3: Choose the credit card you wish to link, i.e., the Fibe Axis Bank Credit Card
  • Step 4: Click on ‘Confirm’ to complete the linking process

Once you have linked the Fibe Axis Bank Credit Card to your UPI ID, you need to generate a 4-digit or 6-digit UPI PIN to start making online payments. Here is how you can generate a UPI PIN:

  • Step 1: Proceed to select the ‘Generate PIN’ option on the UPI application
  • Step 2: Select the credit card, i.e., Fibe Axis Bank Credit Card
  • Step 3: Enter your credit card details, such as the last 6 digits of your card number and the expiry date
  • Step 4: Enter and submit the OTP to set a 4-digit or 6-digit PIN 

Also Read: Fibe Axis Bank Credit Card on UPI apps

How to Pay With the Fibe Axis Bank Credit Card Through UPI

Once you have linked the Fibe Axis Bank Credit Card, you are all set to make seamless online payments. You can pay through UPI using this card by following these simple steps:

  • Step 1: Enter the merchant UPI ID or scan the merchant QR code
  • Step 2: Enter the amount you need to pay or confirm the auto-fetched amount that appears on the screen
  • Step 3: Choose Fibe Axis Bank Credit Card as your payment option
  • Step 4: Enter your UPI PIN and confirm your payment

Now that you know why to get the Fibe Axis Bank Credit Card, apply for it today! Download the Fibe Cash Loan  App or register on the website. With a simple application process, you can instantly add this card to your wallet!

FAQs on Fibe Axis Bank Credit Card Vs Traditional Credit Card

How much cashback can I earn using the Fibe Axis Bank Credit Card?

With the Fibe Credit Card, you can earn cashback of up to 3% on every transaction. 

What are some of the major benefits offered by the Fibe Axis Bank Credit Card?

There are various benefits you can enjoy with Fibe Axis Bank Credit Card. Some of these are:

  • Get cashback of up to 3% on every spend
  • Complimentary domestic lounge visits 
  • Enjoy 1% fuel surcharge waivers every month
  • Get discounts on with dining with partner restaurants  
  • Make easy payments through UPI 
  • Pay no joining or annual fees 

Can I link the Fibe Axis Bank Credit Card with third-party UPI applications?

Yes, since the Fibe Credit Card is a RuPay card, you can link it with third-party UPI applications.

Accrued Interest Explained – Definition & Calculation Guide 2025

Ever wondered what is accrued interest and why it’s important for your finances? Simply put, accrued interest is the interest that builds up on a loan, bond or investment over a specific time even before you pay or receive it. 

Understanding it helps you: 

  • Know exactly how much you owe on your loan before your EMI is due 
  • Track the returns on your investments even before maturity 
  • Plan better for payments, savings, and taxes 

Whether you’re taking a personal loan, buying a bond, or saving in a bank account, knowing how to calculate accrued interest helps you stay financially smart. 

What is Accrued Interest? 

Accrued interest meaning: It is the amount of interest that has accumulated on a loan or investment but hasn’t been paid or received yet. 

This works on the accrual basis of accounting, meaning income and expenses are recorded when they are earned or incurred, not when money actually changes hands. 

How It Works (Previously “How Accrued Interest Works”) 

Three key factors decide how much interest accrues: 

  • Principal Amount – The higher the loan or deposit amount, the more interest accrues. 
  • Interest Rate – A higher rate means more interest is added each day. 
  • Time Period – The longer the accrual period, the more interest you owe or earn. 

So, if you have a loan, interest keeps adding up daily until you pay. Similarly, if you have an FD or bond, interest keeps adding until the payout date. 

How to Calculate Accrued Interest? 

Here’s the standard formula used by banks and financial institutions to calculate accrued interest: 

Accrued Interest = Principal Amount × (Annual Interest Rate ÷ 365) × Number of Days 

This formula assumes daily interest accrual, which is common for loans, deposits and bonds. 

Example 1 – On Loans 

You borrow ₹1,50,000 at 8% annual interest, payable monthly. 

Accrued Interest = 1,50,000 × (8 ÷ 100 ÷ 365) × 30   

= ₹986.30 
This is the interest added to your next EMI. 

Example 2 – On Investments 

You invest ₹10,000 in a bond with a 5% annual coupon rate, payable semi-annually. 

Accrued Interest = 10,000 × (5 ÷ 100 ÷ 365) × 60   

= ₹82.19 

This is the interest you’ve earned so far and will receive in the next payout. 

Types of Accrued Interest 

  • Simple Interest – Calculated only on the principal. 
  • Compound Interest – Calculated on principal + previously accrued interest, grows faster. 
  • Accrued Interest Income – Earnings from savings accounts, FDs, RDs, or bonds. 
  • Accrued Interest Expenses – Interest you owe on loans or credit cards but haven’t paid yet. 

Difference Between Accrued and Paid Interest 

Aspect  Accrued Interest  Paid Interest  
Timing  Interest built up but unpaid  Interest already paid/received  
Accounting  Recorded before payment  Recorded after payment  
Impact  Increases future liability or earnings  Clears liability or confirms income 

Which Financial Products Use Accrued Interest? 

You’ll find accrued interest in: 

  • Savings Accounts & Zero Balance Savings Accounts – Interest accrues daily, even without a minimum balance. 
  • Fixed & Recurring Deposits – Accrues daily or quarterly till maturity. 
  • Loans – Includes personal, home, education, and auto loans; interest accrues until repayment. 
  • Credit Cards – Accrues daily on unpaid balances, usually at high rates. 
  • Bonds & Debentures – Accrued interest is added to the price if bought between payout dates. 

The interest rate you pay or earn directly affects your finances. That’s why Fibe offers Instant Personal Loans up to ₹5 lakhs with competitive interest rates.  

Get quick approvals and easy applications through the Fibe app and borrow smartly. 
 

FAQs on Accrued Interest 

1. How do I calculate accrued interest? 
Use this formula: 

Accrued Interest = Principal × (Rate ÷ 365) × Number of Days 
This is the easiest way to calculate accrued interest on loans or investments. 

2. What is the difference between interest and accrued interest? 

Interest is the total charge on the principal for a specific period. Accrued interest is the part that has been built up so far but hasn’t been paid or received yet. 

3. Is accrued interest taxable? 

Yes, it is taxable under the Income Tax Act, 1961 and subject to TDS. 

Prime Lending Rate Meaning and Its Impact on Loans

If you’re planning to take a loan, it helps to know what is prime lending rate. This rate impacts how much interest you’ll pay on credit cards, home loans or business loans. 

The prime lending rate meaning is simple. It’s the rate banks give to their most creditworthy customers. But it also sets the base for others. Lenders add extra charges on top of it based on your credit score, loan type and risk. So even if you don’t qualify for the best rate, the prime rate in India still affects your borrowing cost.

Read on to know what is prime lending rate, how it works and what to keep in mind before taking a loan.

Prime Lending Rate Meaning

Banks and NBFCs offer the prime lending rate to their most creditworthy customers. Prime rates are decided by lenders based on internal policies and external factors, such as market volatility and economic fluctuations. This rate helps compensate for the lending risk incurred by them. 

Note that the prime lending rate does not directly affect your borrowing costs but acts as a baseline. Financial institutions add a certain spread to this rate based on who the borrower is, the type of loan, and more. 

Since 2010, the base rate scheme has replaced the benchmark prime lending rate or BPLR system as per the mandate of the RBI. This was also replaced by the marginal cost of funds-based lending rate and today, lenders use an external benchmark such as the repo rate. 

The RBI ensures transparency by pushing for a repo-linked lending system, so borrowers can benefit quickly when policy rates drop.

Factors That Affect the Prime Lending Rate

Banks and NBFCs consider many things before deciding their prime lending rate. Each lender may have its own way of setting rates but the basic lending rate formula includes both internal and external factors:

  • RBI Monetary Policy: When the repo rate changes, borrowing costs for banks also change
  • Inflation Levels: Higher inflation usually leads to higher interest rates
  • Market Liquidity: If there’s more money in the system, rates tend to go down
  • Credit Risk: Lenders adjust rates depending on how risky the borrower is
  • Operational Costs: Internal costs of running the bank affect the rate they offer
  • Loan Type and Tenure: Unsecured or long-term loans may come with higher rates
  • Global Trends: Global economic changes can impact how loans are priced in India

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How Prime Lending Rate Differ from Variable Rates?

Prime lending rates and variable interest rates are important concepts affecting your borrowing costs. Here’s how the two work and why they matter for your loan costs.

AspectPrime Lending RateVariable Interest Rate
Who decides it?The lender (based on internal and market factors)Adjusted periodically based on benchmarks like repo rate
ApplicabilityApplied to top-tier customersApplied to most floating interest loans
Change FrequencyLess frequent, internally revisedChanges more frequently as per market movements
Impact on borrowerServes as a base for setting interestDirectly affects EMI amounts
Link to RBIInfluenced by RBI’s policy changesDirectly linked to repo rate or other RBI benchmarks

Effects of Prime Lending Rates on Borrowers

Changes in the prime lending rate can affect different types of loans. Here’s how:

  • Home Loans: A rise in the prime rate increases your home loan EMI if it’s on a floating rate
  • Business Loans: When the prime rate goes up, borrowing costs for working capital and term loans also rise
  • Credit Cards: Interest on outstanding balances is linked to the prime rate in some cases
  • Personal Loans: Unsecured loans may be priced at a spread above the prime rate
  • Loan Top-ups: New credit taken above existing loans may be priced differently based on the revised prime rate

Understanding how interest rates are set and calculated will help you borrow smartly. Today, most financial companies set rates based on external benchmark rates and keeping an eye on them is a wise move as a borrower. 

To apply for affordable credit without any collateral, consider Fibe. With the Fibe Instant Personal Loan, you can get up to ₹5 lakhs in minutes. Download our Personal Loan App or register on our website to apply in minutes!

FAQs on Prime Lending Rate

What is the prime lending rate in India in 2023?

The Indian prime lending rate as of 15th September 2023 is 14.95% p.a.

What is the difference between a lending rate and a prime lending rate?

The prime lending rate is the rate commercial banks charge for loans from borrowers with high creditworthiness. The lending rate is the interest rate that financial institutions normally charge for loans.

What is an example of a prime rate?

Say a bank provides personal loans at an interest rate of 18% to its regular customers. To a creditworthy borrower, it may offer a loan at a lower rate of 16%, which may be referred to as the prime lending rate.

Auto Sweep Facility: Banks List, How to Activate & Benefits?

If you often leave extra money sitting in your savings account, you may be losing out on better returns. That’s where the automatic sweep feature comes in. Many people search for what is auto sweep facility because it promises higher interest without you having to lock your money away.

You can think of it as a smart upgrade to your regular savings account. Whenever your balance crosses a limit chosen by you, the bank quietly moves the extra amount into a small fixed deposit. Your money starts earning a higher FD rate while you still enjoy the freedom to withdraw anytime. It’s simple, effortless and a great way to make your idle funds work harder.

What is an Auto Sweep Facility?

An auto sweep facility is a smart banking feature that helps you earn more from your savings without changing the way you use your account. It works by connecting your savings account to a small FD in the background. When your balance goes beyond a limit you set, the extra amount is automatically shifted into this FD.

Two simple actions make the feature work:

  • Sweep-in: The bank moves your surplus balance into the FD so it can earn a higher interest rate.
  • Sweep-out: If you need to withdraw more money than what is in your savings balance, the bank automatically pulls the required amount back from the FD.

This way, you enjoy better returns on your idle funds while still having complete access to your money whenever you need it.

How Does the Automatic Sweep Facility Work?

Here’s how the auto-sweep facility works:

  • Set a threshold limit: You choose a minimum balance for your own account.
  • Sweep-in happens automatically: When your balance crosses this limit, the extra money is moved into an FD. This FD earns a higher interest rate than your savings account.
  • Full liquidity remains: If you withdraw an amount that is higher than your savings balance, the bank automatically uses sweep-out to break the FD partially and give you the money.
  • Interest keeps growing: Only the required portion is broken, so the remaining FD keeps earning interest.

Here’s an example:

If your threshold is ₹25,000 and your balance comes to ₹40,000, then the excess ₹15,000 will be moved to an FD automatically. So if the FD interest is 6 percent, you earn higher returns on this ₹15,000 instead of the usual savings rate.

How to Activate Auto Sweep Facility?

Here’s an easy step-by-step guide to activate your auto sweep facility:

Step 1: Log in to your bank’s net banking or mobile app
Step 2: Look for the ‘Deposits’ or ‘Sweep Facility’ option in the menu
Step 3: Choose the savings account you want to link
Step 4: Enter basic details like your threshold amount, sweep cycle and start date
Step 5: Verify the request using the OTP sent to your registered mobile number
Step 6: Submit the request. You’ll receive a confirmation once the facility is activated

Also Read: Best Banks For Savings Accounts In India

Pros and Cons of the Auto Sweep Facility

Here are some of the pros and cons of availing of the facility of auto sweep in a savings account:

Pros

ProsHow It Helps
Higher returnsExtra funds earn FD-like interest instead of the lower savings rate
Easy liquidityYou can withdraw anytime. The bank automatically uses sweep-out if needed
FlexibilityYou can choose your own threshold limit and FD tenure
Better money managementIdle funds get utilised automatically without any manual effort

Cons

ConsWhat to Know
Possible chargesSome banks may apply a fee for activating or using the sweep facility
Premature FD penaltyBreaking the FD early may lead to a small penalty deduction

Auto Sweep Facility Banks List

Many financial institutions in India offer this feature on savings accounts. Here are some of the leading banks allowing you to opt for the auto-sweep facility:

  • Bank of India
  • State Bank of India 
  • HDFC Bank 
  • ICICI Bank 
  • Kotak Mahindra Bank
  • Bank of Baroda
  • IDFC First Bank

You can visit your bank’s branch or contact customer support to know if the facility is offered for your savings account. You can also visit the bank’s website and log in to your account.

The money lying in an auto sweep account helps you create a corpus for emergency expenses or long-term goals. However, if you ever fall short on cash for your lifestyle needs, you can also rely on Fibe’s quick and hassle-free Instant Cash Loan. 

You can get up to ₹5 lakhs and enjoy instant disbursal with affordable interest rates and flexible tenures going up to 36 months. Download the Personal Loan App or log in to our website to secure a loan with an easy and simple application process.

FAQs on Automatic Sweep Facility

Is auto-sweep good or bad?

The auto sweep in a savings account is ideal if you often have a large balance in your account that you don’t need to access frequently. 

What is the minimum balance for an auto-sweep account?

The minimum balance in an auto-sweep savings account depends on the bank and your account type. 

Can I withdraw money from the auto-sweep account?

Yes, an auto sweep account offers the same level of liquidity as a regular savings account, which means you can easily withdraw the excess money whenever you need.

Do sweep accounts pay interest?

Yes, the automatic sweep facility offers interest on the savings account as well as the FD account created after the sweep-in. Moreover, the auto sweep account interest rate is generally higher than that of a regular savings account.

How to Increase Your Credit Card Limit (5 Useful Tips)

Credit card issuers increase your limit based on your financial profile and creditworthiness. They will check your income, existing debt, number of cards, job status, repayment history and credit score. A higher limit gives you more spending power for shopping, essentials, food, travel and entertainment.

This is why a credit card limit increase can be helpful. So, if you are wondering how can I increase my credit card limit, let’s first understand what affects your limit and how issuers decide it.

What is a Credit Card Limit?

A credit card limit is simply the maximum amount you can spend on your credit card at one time. This is also called your total credit limit. The bank sets this limit after looking at your income, credit score, repayment history and overall credit behaviour.

Let’s say your total credit limit is ₹1 lakh. In this case, you can up to ₹1 lakh on your card for purchases, bills or bookings. But using your card wisely and paying dues on time is important. It helps keep your credit score in good shape. As your income grows or your credit profile improves, you can request a credit card limit enhancement.

How Do Issuers Decide Credit Card Limits?

If you want to understand how to increase your credit card limit, it’s important to first see what banks look at while setting your limit. Here are the main factors involved:

  • Credit score: A higher credit score shows strong repayment discipline. A CIBIL score of 750 or above improves your odds for a credit card limit increase.
  • Payment history: Regular on-time payments reassure issuers that you can manage higher credit responsibly.
  • Debt-to-income ratio: If a large part of your income goes towards existing loans or EMIs, issuers may hesitate to approve a higher limit.
  • Income level: A stable and higher income indicates better repayment capacity and supports a credit card limit increase.
  • Type of credit card: Premium or elite cards usually come with higher limits compared to basic or entry-level cards.

How to Improve Credit Card Limit?

If you are thinking how to upgrade credit card limit, some of these practical steps can help:

  • Pay bills on time: Consistent and timely repayments show financial discipline and increase your chances of approval.
  • Avoid maxing out your limit: Try to keep your spending within 30 to 40% of your available credit each billing cycle.
  • Show higher income: Updating your income documents after a salary hike can support your request for a credit card limit increase.
  • Request a limit increase: You can directly approach your issuer if you feel your financial profile has improved.
  • Wait for automatic upgrades: Some banks offer automatic limit increases based on usage and repayment behaviour.

If you often keep thinking I want to increase my credit card limit, following these habits can make a difference.

Impact of Credit Card Limit on Credit Score

Your credit card limit directly affects your credit utilisation ratio, which is a key factor in your credit score. Using less than 30% of your available limit helps maintain a strong score. Maxing out your limit can hurt it. But a higher limit can lower your utilisation if spending remains controlled. Responsible usage, along with periodic credit card limit enhancement, strengthens your overall credit profile.

What are the Benefits of an Increased Credit Card Limit?

A higher credit limit offers several advantages when used responsibly:

  • Higher spending power: Make larger purchases without frequent declines
  • Better credit score: Lower utilisation improves your credit health over time
  • More rewards and cashback: Higher eligible spends can unlock better benefits
  • Emergency backup: Extra credit can help with unexpected expenses
  • Improved loan eligibility: Higher limits reflect stronger creditworthiness
  • Better financial flexibility: Manage monthly expenses more comfortably

With disciplined usage, timely repayments and regular income updates, learning how to increase credit card limit becomes easier. Responsible behaviour not only helps you secure a higher limit but also improves your overall financial standing.

For an enhanced experience, choose the Fibe Axis Bank Credit Card. With this card, you get higher security as it is a numberless credit card that links to your UPI ID. Moreover, it is a lifetime-free card offering exclusive benefits that make every transaction rewarding. Download the Fibe Instant App or register on our website to apply now!  

FAQs on How to Increase Credit Card Limit

How to increase my credit card limit to the maximum?

Maintaining a high credit score, paying bills on time and providing updated income proof improve your chances of getting the maximum eligible limit.

How to get a ₹1 lakhs credit card limit?

A ₹1 lakh limit depends on your income, credit score, job stability and existing debt. Responsible usage can help you qualify for credit card limit enhancement.

What is the highest credit card limit available?

Credit card limits vary by issuer and card type. In India, limits of ₹4 to ₹8 lacs are common for premium cards and may go higher based on income.

What is a good reason to request a credit card limit increase?

A valid reason is improved income or spending needs, as a higher limit gives you better flexibility and lower credit utilisation.

Credit Card Loan Vs Personal Loan: Key Differences Explained

Knowing more about the differences in features of personal loans vs credit cards is important so you can choose the right one during times of need. To ensure you can meet and address your financial obligations, figuring out which of these supports your needs for quick and restrict-free usage is key. Read more below to learn the difference between these options and the advantages and disadvantages of both.

What is a Loan?

A loan is when you receive a lump sum amount for a fixed tenure. You pay the lender the interest and a part of the principal in fixed monthly installments. These monthly installments are received all through the pre-determined tenure. In some cases, you just pay the interest as EMIs and the principal after the end of the tenure. 

A personal loan is a type of loan which does not require you to pledge any object/investment as collateral to get capital or funds. This is a popular choice for borrowers due to the reason that your assets are not at risk. 

What is a Credit Card? 

A credit card is a form revolving credit in which the lender offers a certain limit of credit to you, depending on your creditworthiness. Usually, the billing cycle tenure is one month, and you can use this card to make purchases within the decided limit. Once you have repaid the billing amount your limit is refreshed and you can continue using it in the next month. 

A high interest will be applicable if you have an outstanding balance on your credit card bill but if you repay it on time, no interest is applied. This card also offers additional perks, such as discounts from partner merchants and more. 

Credit Card vs Personal Loan: Key Differences

The table below lists the finer details of both credit solutions so you can choose the ideal one for yourself. 

ParameterPersonal LoanCredit Card
Type of Financing The loan amount is sanctioned as a one-time credit facility to the borrowerInvolves revolving credit where you can use funds up to the credit limit; on repayment, the limit is restored
Tenure Can go up to 6 years Your billing cycle ranges from 27 to 31 days in most cases, and you get up to 25 days to clear the credit card bill.
Schedule of Repayment Fixed monthly payments in the form of EMIs in generalRevolving monthly repayment that is based on usage up to the credit limit 
Interest Rate Fixed or floating interest rates that are usually lower than credit card interest rates Higher interest rates as compared to personal loans, which only apply to unpaid balances, if any 
Fees Processing charges, EMI bounce charges, and penal interest may apply Annual fees, joining fees and late fees may apply
Purpose End usage is not restricted; you can use the amount for home renovation, education fees, travel, emergencies, etc.It can be used for daily needs such as shopping, entertainment, education, etc.

How to Choose Between a Personal Loan and a Credit Card

Understanding the purpose of your expenses is necessary before deciding which one to choose. Both can help you build your credit score with responsible repayment. Below is a brief comparison to help you understand which option to choose when:

Uses of a Credit Card 

  • Get instant credit for daily needs like fuel, groceries and more
  • Buy flight and train tickets 
  • Get rewards and cashback on shopping, dining and entertainment 
  • Maintain cash flow for a business 
  • Address expenses during festive occasions 

Uses of a Personal Loan 

  • Financing wedding expenses or travel 
  • Debt consolidation 
  • Medical emergencies 
  • Renovating a house 
  • Starting a new business 
  • Education fees and accommodation 

You can choose a credit card based on your requirements to fulfil smaller or recurring needs. A loan can be ideal if you are making a one-time big-ticket purchase or expense. All in all, you can compare and choose personal loans vs credit cards depending on your financial requirements. 

With Fibe, you can apply for an Instant Cash Loan of up to ₹5 lakhs at an affordable interest rate. You can get the funds without lengthy paperwork and repay it comfortably with flexible tenures. 

However, if you want a credit card instead, you can opt for a Fibe Axis Bank Credit Card. This numberless credit card gives you additional security with up to 3% cashback on every transaction. You also need not pay any joining or annual fee as it is a lifetime-free card. Download the Fibe Personal App or register on our website to get started. 

FAQs on Revolving Credit and Loans

Is a loan an example of credit?

Yes. A fixed amount for a specified tenure is provided by the lender as a loan. Within the tenure, you are liable to pay monthly instalments to repay the loan. 

Are cash credit and loans the same?

Yes. Cash credit is also known as a short-term loan, where the repayment tenure can last up to one year. According to your professional or personal needs, it helps you maintain cash flow.

Is it better to take a personal loan or credit card?

The better option depends upon the user’s preference. A personal loan is taken for big one-time purchases, whereas a credit card can be taken for smaller and regular purchases. 

Is credit card interest higher than personal loans?

Yes, but if you pay the due bills on time, the interest does not apply. High interest rates are applicable if you fail to make the minimum payment on the due date of the credit card statement. 

What is the tenure of personal loans and credit cards?

In personal loans, the tenure can go up to years. For credit cards, the tenure of billing is refreshed within a cycle of 25-31 days.