Credit Card- A Plastic Money

Credit Card is a plastic card that is issued by financial company to the holders to borrow instant funds at the point of sale. It denoted the good credit ranking of the person and also is a promise that the borrower will repay the money within due date. It has become a lifestyle asset for the third generation people. But it can become liability to you if you do not have control on your spending. Here are some advantages and disadvantages of credit card payment.

Advantage of Credit Card Payment: 

• People can purchase items even they do not have money. The can take instant fund and can shop the items. 

• People are not required to carry cash to do shopping. 

• You can take the loan and at the same time have a reputation of good credit history. 

• People can do shopping anywhere. It helps you buy products online. Wireless Credit Card helps you make the payment online. Electronic payment system is really good and convenient mode to shop items. 

• It gives you reward points that you can redeem and enjoy the benefit.

Disadvantages of Credit Card Payment: 

• You are required to pay some extra amount for the product in the form of tax. Different companies levy different tax amount on Credit Card Processing. 

• You are levied heavy tax than that of normal loan if you cross the due date of payment. It also damages your credit rating. 

• It allows you to take more debt than that you can handle. It sometime makes you uncontrolled and you can buy unnecessary items at high cost.

Some Hidden Charges:

Nowadays most of the banks not informing the customers about the fees change and there is no clear intimation. It will affect your expenses and have to handle this clearly.

1. Avoid late payment fees

It is always keep in mind that the due date for all your Credit Cards. If you are missing the due, it will end up paying the late payment fees. Also periodically check for the due date, if there is any change by the bank.

2. Annual Fees

It is another expenses happening in the every year. If you taken the card with the life time free, then there should not be any fees for using the credit card. You have the rights to ask the company and they are responsible to provide the explanation.

3. Interest Rates

Learn about the Interest Rates of credit cards. There is lot of trick in explaining the interest rates by the banks. They will not tell you the annual rate for the credit cards. Because, it is higher than the other form of loans like Personal Loans, etc. It is always good to avoid taking the huge amount from the credit cards.

These are the advantages and disadvantages of credit card payment. Having a credit card is not bad rather it is an asset for you if you utilize it properly. You should try to make use of credit card only when you need urgently. It is for emergency and not for fun and entertainment. Understand the value of money and make its proper use. You will then find it to be an angel in distress.

Most of the people have a question in their mind that who give the instant loan to make the payment and how is credit card payment settled? The answer is – through merchant account. Merchant Accounts are special bank accounts that deal with credit card payment and settlement. These accounts are agreement between the credit card companies and the retailers to settle the payment.

Health Insurance :- Key Features & Benefits

The basic benefit of health insurance (also called mediclaim) i.e. covering the unforeseen medical expenses, there are few other features and benefits in most of the products offered in the market. Some of them are listed below:

Family Floater Policies: Most health insurance plans give the flexibility of covering up to 4 members of the family under the same plan with a slightly higher premium than an individual health insurance policy. It gives the flexibility of choosing say 4 or 5 lakhs of cover for the entire family. If one member in the family is hospitalized and uses about Rs. 2 lakhs for his treatment, then the rest 3 lakhs can be availed by others. It is very unlikely that more than 1 or 2 members would require hospitalization in the same year. Hence the family floater serves the purpose whoever in the family falls ill.

Hospitalization Cash Benefits: This benefit entitles the customer to cash benefits for every completed day of hospitalization, which helps him to take care of the increased financial burden incurred at the time of hospitalization, such as loss of earnings away from work and other expenses.

Cashless facility: There is a network of hospitals tied up with each insurance company which accepts the insured’s medical identity card (issued by the insurance company) for providing cashless facility to the insured. Hence either part or entire expenses are covered by the policy and the individual doesn’t need to spend from his pocket.

Pre-hospitalization and Post-hospitalization benefits Some mediclaim policies provide for up to 60 to 90 days of pre-hospitalization and post-hospitalization benefits, i.e. the cost of medical tests, medicines, scans, etc. This is usually provided under maternity benefits and treatments which do not require hospitalization.

Ambulance Charges In most cases the ambulance charges are taken up by the policy and the policy holder usually doesn’t have to bear the burden of the same.

Health check up Some health insurance policies have a facility of free health check-up for the well being of the individual if there is no claim made for certain number of years.

Cover for Pre-existing Diseases Some health insurance policies have a facility of covering pre-existing diseases after 3 or 4 years of continuously renewing the policy, i.e. if someone has diabetes, then after completion of 3 or 4 years of continuous renewal with the same insurer (depending on the plan offered and his age), any hospitalization due to diabetes will also be covered.

No-Claim Bonus Some health insurance policies provide a no-claim bonus. If there has been no claim in the previous year, i.e. if the person covered has not availed any hospitalization benefit, then a bonus is declared; either by reducing the premium or by increasing the sum assured by a certain percentage of the existing premium.

Tax Benefits of taking a Health Insurance Policy Under Section 80D of the Income Tax Act, income tax benefit is provided to the customer for the premium amount till a maximum of Rs. 15,000 for regular and Rs. 20,000 for senior citizen respectively.

Take Advantage of Nomination Facilities

Registering a nomination facilitates easy transfer of funds to the nominee on the demise of the investor.

What is a Nomination?

An investor can nominate a person(s) called nominee(s) to whom his/her Mutual Fund Units will be transferred on his / her demise.

Mutual Fund units get transferred to the nominee registered in the folio on the demise of the Investor.

What are the benefits of registering a nomination?

Registering a nomination facilitates easy transfer of funds to the nominee(s) on the demise of the investor. In the absence of the nominee, a claimant would have to produce a host of documents like a Will, Legal Heir-ship Certificate, No-objection Certificate from other legal heirs etc. to get the units transferred. The process is simple if a nominee is registered in the folio.

How can an investor make a nomination?

Nomination can be registered at the time of purchasing the units. While filling in the application form, there is a provision to fill in the nomination details.

Alternatively, an investor may register a nomination later through a form which may be submitted with relevant particulars of the nominee.

The forms are available on the mutual fund websites.

Investors may also request the registrar and transfer agent to send a form.

Can an investor make multiple nominations?

Yes! An investor may make up to three nominations and even specify the percentage of the amounts that will go to each nominee.

If the percentage is not specified, equal shares will go to the nominees.

Can a minor be a nominee?

Yes! A minor can be a nominee. However the guardian will have to be specified in the nomination form.

Can a nomination be changed?

A nomination can be changed and even cancelled. The relevant form should be filled and submitted to the Registrar or Mutual Fund Office.

If an investor has different schemes in a folio, will all units of all schemes be transferred to the nominee?

A nomination is at folio level and all units in the folio will be transferred to the nominee(s).

If an investor makes a further investment in the same folio, the nomination is applicable to the new units also.

Who can nominate and who is eligible to be a nominee?

Nominations can be made only by individuals applying for / holding units on their own behalf, singly or jointly.

Non-individuals, including societies, trusts, body corporates, partnership firms, the karta of an HUF, and the holder of a power of attorney (POA) cannot nominate.

Nomination can be in favour of individuals, including minors, the Central Government, State Government, a local authority, any person designated by virtue of his office or a religious or charitable trust.

A non-resident Indian can be a nominee, subject to the exchange control regulations in force from time to time.

Source:- The Hindu

Do's and Dont's Before Choosing Your Broker

DO'S

• Always deal with the market intermediaries registered with SEBI / Exchanges
• Give clear and unambiguous instructions to your broker / agent / depository participant
• Always insist on contract notes from your broker. In case of doubt of the transactions, verify the genuineness of the same on the Exchange website.
• Always settle the dues through the normal banking channels with the market intermediaries
• Before placing an order with the market intermediaries please check about the credentials of the companies, its management, its fundamental a recent announcements made by them and various other disclosures made under various regulations. The sources of information are the websites Exchanges and companies, databases of data vendor, business magazines etc.
• Adopt trading/ investment strategies commensurate with your risk bearing capacity as all investments carry risk, the degree of which vary according to the investment strategy adopted.
• Please carry out due -diligence before registering as client with any intermediary. Further, the investors are requested to carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of investor registration requirement for dealing through brokers in Stock market.
• Be cautions about stocks, which show a sudden spurt in price or trading activity, especially low price stocks.
• Please be informed that there are no guaranteed returns on investment in stock markets.

DONT'S

• Don’t deal with unregistered brokers / sub-brokers, intermediaries
• Don’t deal based on rumors generally called 'tips'
• Don’t fall prey to promises of guaranteed returns.
• Don’t get misled by companies showing approvals / registrations from Government agencies as the approvals could be for certain other purposes a not for the securities you are buying.
• Don’t leave the custody of your Demat Transaction slip book in the hands of any intermediary
• Don’t blindly follow media reports on corporate developments, as they could be misleading.
• Don’t get carried away with onslaught of advertisements about the financial performance of companies in print and electronic media.
• Don’t blindly imitate investment decisions of others who may have profited from their investment decisions

Health Insurance in India Part I

In mid 80’s most of the hospitals in India were government owned and treatment was free of cost. With the advent of Private Medical Care the need for Health Insurance was felt and various Insurance Companies (New India Assurance, National Insurance Company, Oriental Insurance & United Insurance Company) introduced Mediclaim Insurance as a product.

According to recent news report health insurance continues to be the fastest growing segment with annual growth rate of 25%. Health Premium has risen to Rs. 8100 crores in 2009-2010. As per the recent reports from various agencies the health sector has the potential to become a Rs. 30000-crore industry by 2015. Estimates of leading Chambers of Commerce also confirm these estimates.

On August 15, 2007 Prime Minister had announced Rs 2000 Crores for Health Insurance for poor citizens and the impact of the same is being seen by us in the form of success of RSBY (Rashtriya Swasth Bima Yojna).

In 2001 with entry of various private Insurance companies now the customers have choice of buying this insurance from 21 Insurance companies.

The Companies, which offer Health or Mediclaim Insurance, are;

Apollo Munich Insurance Company Limited Bajaj Allianz General Insurance Co. Ltd. Bharti AXA General Insurance Co. Ltd. Cholamandalam MS General Insurance Co. Ltd. Future Generali India Insurance Co. Ltd. HDFC ERGO General Insurance Co. Ltd. ICICI Lombard General Insurance Co. Ltd. IFFCO Tokio General Insurance Co. Ltd. Larson & Toubro General Insurance Co. Ltd. Max Bupa Health Insurance Co. Ltd. National Insurance Co.Ltd. New India Assurance Co. Ltd. Oriental Insurance Co. Ltd. Raheja QBE General Insurance Co. Limited Reliance General Insurance Co. Ltd. Religare Health Insurance Co. Ltd. Royal Sundaram Alliance Insurance Co. Ltd SBI General Insurance Co. Ltd. Shriram General Insurance Co. Ltd. Star Health and Allied Insurance Company Limited Tata AIG General Insurance Co. Ltd. United India Insurance Co. Ltd. Universal Sompo General Insurance Co. Ltd.

India is the only country where hospitalization insurance policy was being sold as Mediclaim Insurance Policies. The very name gives a feeling to the insured that claim has to be lodged. If motor insurance policy is not sold as motor insurance claim policy and household insurance policy is not sold as household claim policy then why this be named as Mediclaim?

In the recent years the trend has emerged that some Insurance companies have started calling this product as Health Insurance.

Health Insurance and Mediclaim are two different names for the same product. The change has started coming and now we have started calling it Health Insurance. ICICI Lombard has even named it as Health Insurance Policy.

Calling is as Health Insurance is a positive way of looking at this Insurance. It also giving us a feeling that we as a society have started moving from curative medical care to preventive medical care.

According to sources in Oriental insurance it is being felt that mindset has started changing over the last couple of years “ The new middle- class of of India aspires for quality healthcare service and doesn’t mind going to expensive hospitals like Apollo or Escorts. There is no reason why healthcare insurance should not be successful with this class. RQVADMDZ9M44

Thinking Clearly About Inflation

The subject of inflation, which occupied the media and the politicians in 2008 until the global financial crisis put an abrupt end to it, has returned to the centre stage of the policy debate. The big difference, however, is that this time around the government has been much calmer.

Previously, the increase in the year-on-year wholesale price index (WPI) to 8% in April 2008 from 4.5% in January 2008 had the government reach out to every conceivable weapon in its arsenal regardless of its suitability for combating inflation. The government’s actions included cuts in import duties, bans on exports, appreciation of the rupee, rise in the cash reserve ratio, suspension of the futures trade, cuts in excise duties, export taxes and threats of price controls.

In the current bout, the WPI inflation has been higher and the reaction of the opposition parties much fiercer. Yet, delightfully, the government has refused to panic. It has firmly carried out the deregulation of petrol prices and, in large part, confined the policy action to monetary instruments.

Most importantly, the government has shown great sensitivity to possible adverse impact of overly aggressive actions against inflation on growth, which is so essential to poverty alleviation. The ruckus in the Lok Sabha notwithstanding, finance minister Pranab Mukherjee has boldly stated that excessive hikes in the interest rates would lead to “no investment, growth or job creation.”

Because inflation can cut both ways even from growth perspective, it often poses a dilemma for the policymaker. Undue tightening of monetary policy to contain inflation may choke off investment and therefore growth. At the same time, excessively high inflation rates, which result in highly negative real interest rates, may be detrimental to savings and hence growth.

They may also make the relative price signals noisy and distort the allocation of investment. Luckily, so far, the annual increases in the WPI of all commodities, shown in the accompanying chart, give us no reason to panic. While inflation began to accelerate in February 2010, taking 2009-10 as a whole, the inflation rate has been just 3.8%.

Admittedly, WPI inflation from February to June 2010 has been in the 10-11% range. But inflation at these rates is scarcely unprecedented. Similar rates had been experienced not just on monthly but annual basis in the first half of the 1990s.

Moreover, the current high rates are largely reflective of low rates in the corresponding months in the previous year. Ultra-low monthly inflation rates of –1 .0 to 3.5% between February and October 2009 left the base over which the inflation rates for the months of February to October 2010 are calculated low. This fact implies that monthly year-on-year inflation rates will remain high until October 2010.

While the measured response of the government to overall inflation is, thus, to be admired, its performance with respect to food-price inflation cannot escape criticism. At 14.7% in 2009-10, wholesale price inflation in food articles has been much higher than the WPI inflation for all commodities. Recent monthly data yield even higher rates: between December 2009 and June 2010, monthly food inflation ranged from 14.6 to 20%. 

No doubt, some factors relevant to this inflation such as crop failures, diversion of grain supplies to biofuels, shifts in cultivation patterns away from food crops and rising food grain demand in India and China are beyond the government’s control. Nevertheless, the government’s mismanagement must be held responsible for a significant part of the people’s plight over this inflation.

Thus, consider the scale of resources and network the government deploys in food distribution in the name of helping India’s poor. Nationwide, it runs a staggering 450,000 fair price shops. Its public distribution system (PDS) currently absorbs a gigantic Rs 47,000 crore (approximately $10 billion) in subsidies annually. This is more than Rs 10,000 per year per rural household below the official poverty line.

Above all, the Food Corporation of India (FCI) currently sits on top of a 60.5 million tonnes foodgrain mountain. This supply is sufficient to give every single household in India 21 kilograms of grain every month for a whole year. Sadly, almost 18 million tons or 30% of this stock is stored in the open. If the past experience is any guide, a significant part of the stock will eventually be washed away by rains, eaten by rats and pests or rendered unsuitable for human consumption due to rotting.

If private traders held even a tiny proportion of this stock, they would become subject to prosecution under the Essential Commodities Act, 1955. But the same does not hold true for the government. Even the failure to release the stock when food prices escalate carries no punishment for it. And, of course, corrupt politicians and officials can deliberately slow down the release of the grain to profit private traders at the expense of the public.

Most analysts now agree that the solution to the problem is a highly downsized FCI with its operations limited to regions that private traders will not serve. Other needy households should be provided cash subsidy that leaves them free to choose what they buy, when and from whom. The government must also give up its monopoly on international trade in many food items and rely on custom duties to regulate trade flows. Private traders can handle exports and imports at least as efficiently as the government.

But, alas, the government is moving in the reverse direction. It wants to implement the right to food in a way that gives it the right to distribute more food, further expand the FCI food stocks and put yet more grain in the open for destruction by the rains, rats and pests — all in the name of helping the poor and at the expense of the honest taxpayer!

(The author is a professor at Columbia University)

Source:- Economic Times

Indian Rupees Symbol

Finally Indian Rupees got an International Recognized Symbol.Finance Minister Pranab Mukherjee announced that a new numerical symbol which will be like US Dollar, Euro and Pound for the Indian Rupee.
Reserve Bank Of India already shortlisted five symbols.The final symbol for India Rupee is announced on June 24th 2010.

The shortlisted design apparently plays on the Hindi letter ‘R’ with a .