Frequently Asked Questions (FAQs)
Credit Card
What is a Credit Card?
A Credit Card is a type of loan that does not need security and allows you to buy goods and services now and pay later.
How much can I borrow through a Credit Card?
A predetermined limit set by your bank/finance company. This is called your credit limit.
How is my credit limit decided?
Mainly based on your income and ability to repay.
What should I know before applying for a Credit Card?
- How it works
- Eligibility criteria
- Credit limits
- How to use
- Applicable fees and charges
- Interest rates and their calculation methods
- Repayment options
- Minimum payment requirements
- Available rewards and benefits
- Security/safety of usage
- Your responsibilities involved
How does a Credit Card work?
When you use a Credit Card, all your spending is collected for a specific period called the billing cycle. After the billing cycle ends, you get another 20–25 days (called the grace period) to pay back the full amount you used. If you pay everything within this time, no interest and late payment fee will be charged.
Usage
Where can I use a Credit Card?
You can use it at shops, online stores, and other places that accept cards to pay for goods and services.
Can I withdraw cash using my Credit Card?
Yes. You can get a Cash Advance, but interest and a fee will be charged.
How can I get a Cash Advance?
Usually from an ATM or a branch of the bank/finance company.
How much cash can I withdraw?
Your Credit Card has a maximum Cash Advance limit decided by your bank/finance company, which is usually lower than your total credit limit.
Can I exceed my credit limit?
Yes. Only up to a certain limit decided by your bank/finance company for emergency use.
How can I know how much I can exceed?
The exact overlimit amount is not disclosed as this is not for regular use, but you can check by contacting your bank/finance company.
What happens if I exceed my credit limit?
You will be charged an overlimit fee.
Can I use my Credit Card to perform foreign currency transactions?
Yes.
Can I perform any type of foreign currency transaction?
No.
What are the restricted types of foreign currency transactions?
- Dealings in foreign exchange (Forex Trading)
- Payments related to virtual currency transactions
- Payments related to betting, gaming and gambling activities outside Sri Lanka
- Payments for import of goods to Sri Lanka for commercial purpose
Can I use my Credit Card in foreign countries?
Yes. You might have to inform your bank/finance company prior to usage.
Fees and Charges
Are there fees and charges applied for Credit Cards?
Yes.
What are the fees and charges applicable?
Joining Fee, Annual Fee, Late Payment Fee, Cash Advance Fee, etc.
What is a Joining Fee?
A one-time fee charged when you receive your card. Some banks/finance companies may waive it.
What is an Annual Fee?
A yearly fee for using the card. Amount depends on the card and bank/finance company.
What is a Late Payment Fee?
A fee charged when you fail to make the required payment on or before the due date.
What is a Cash Advance Fee?
A fee charged at each time you obtain a Cash Advance. Usually, a percentage of the amount withdrawn or a fixed minimum fee.
Are there fees and charges applicable for foreign transactions?
Yes. In most cases, an additional percentage is charged on top of the applicable exchange rate as a foreign transaction fee. Additionally, a government stamp duty or other statutory charges may apply when using your card for such transactions.
Repayments and Settlements
What is a billing cycle?
It is the time frame (usually about 30 days) during which your bank/finance company tracks your spending.
Can I choose my own billing cycle?
Yes. You can choose one of the available cycles offers by your bank/finance company.
Can I check how much I spent during my billing cycle?
Yes.
How can I check how much I have spent?
You can call your card center, or the bank/finance company will send you a statement physically or digitally showing what you spent and how much you need to pay.
When do I have to pay my Credit Card bill?
On or before the due date. It is printed on your monthly statement.
Do I get any grace period for the payment?
Yes. You will get additional days of 20 to 25 after your statement date to pay back. This is the period between your statement date and the due date.
What is the statement date?
It is the last day of your billing cycle which is printed on your monthly statement.
What is the transaction date?
It is the exact date you make your purchase or payment.
What is the posted date?
It is the day your transaction is recorded on your account. It usually falls 1-2 days after the transaction date.
What is the settlement date?
It is the day your bank/finance company transfers funds to the merchant. Usually it is 1–3 business days after transaction.
What happens if I don’t pay the full amount at once, on or before the due date?
You will be charged an interest and maybe a late payment fee.
What happens if I pay the full amount after the due date but before the next billing cycle ends?
You will be charged an interest. In addition, you will also be charged a late payment fee.
What if I cannot pay the full amount?
You can choose to pay only part of the balance, preferably the minimum payment or more.
Is there a minimum amount I should pay?
Yes. This amount is on your statement.
What happens if I pay only the minimum payment/ more than the minimum payment but less than the full amount on or before the due date?
You will not be charged a late payment fee. However, interest will be charged.
What happens if I pay more than the minimum payment but less than the full amount after the due date?
You will be charged a late payment fee and an interest.
What happens if I don’t pay anything at all or below the minimum payment?
You will be charged a late payment fee and interest.
Who are Transactors?
People who pay the full balance on or before the due date to avoid interest.
Who are Revolvers?
People who pay only the minimum amount and carry forward the balance only to avoid late payment fee but causing interest to accumulate.
What benefits me the most?
It is always beneficial for you to settle the full amount on or before the due date and avoid interest. In other words, being a Transactor.
Credit Card Payment Options and their effect on Interest & Fees
Interest Rates and their Calculation Methods
How is my Credit Card interest calculated?
- Statement as at 31.01.2025
- Billing Cycle from 01.01.2025 to 31.01.2025
- Due date 25.02.2025
- Minimum payment - Rs. 803.92
|
Transaction Date |
Description |
Transaction Amount (Rs.) |
Balance (Rs.) |
|
1-Jan-25 |
Opening Balance |
- |
0.00 |
|
7-Jan-25 |
Purchase |
5,000.00 |
5,000.00 |
|
20-Jan-25 |
Cash Advance |
10,000.00 |
15,000.00 |
|
31-Jan-25 |
Cash Advance Fee |
1,000.00 |
16,000.00 |
|
31-Jan-25 |
Interest for Cash Advance* |
78.36 |
16,078.36 |
|
31-Jan-25 |
Closing Balance |
- |
16,078.36 |
- Interest for Cash Advance = 78.36 (10,000 x 26/100 x 365 x 11*)
* 11 days – from 20-Jan-25 to 31-Jan-25
- Statement as at 28.02.2025
- Billing Cycle from 01.02.2025 to 28.02.2025
|
Transaction Date |
Description |
Transaction Amount (Rs.) |
Balance (Rs.) |
|
1-Feb-25 |
Opening Balance |
- |
16,078.36 |
|
15-Feb-25 |
Purchase |
2,000.00 |
18,078.36 |
|
21-Feb-25 |
Payment |
5,000.00 |
13,078.36 |
|
28-Feb-25 |
Interest |
455.26 |
13,533.62 |
|
28-Feb-25 |
Closing Balance |
- |
13,533.62 |
Payment is made in partial (more than the minimum payment requirement) before the due date.
Interest Calculation
|
Date Range |
Description |
Amount |
Rate |
No. of Days |
Interest Calculation |
Interest Amount (Rs.) |
|
|
20-Jan-25 |
21-Feb-25 |
Cash Advance |
10,000.00 |
26% |
32 |
10,000 x (26/100)/ 365 x 32 |
227.95 |
|
22-Feb-25 |
28-Feb-25 |
Remaining Cash Advance |
5,000.00 |
26% |
6 |
5,000 x (26/100)/ 365 x 6 |
21.37 |
|
1-Feb-25 |
28-Feb-25 |
Cash Advance Fee |
1,000.00 |
26% |
27 |
1,000 x (26/100)/ 365 x 27 |
19.23 |
|
7-Jan-25 |
28-Feb-25 |
Purchase |
5,000.00 |
26% |
52 |
5,000 x (26/100)/ 365 x 52 |
185.21 |
|
1-Feb-25 |
28-Feb-25 |
Interest for Cash Advance |
78.36 |
26% |
27 |
78.36 x (26/100)/ 365 x 27 |
1.51 |
|
Total Interest |
455.26 |
||||||
This is a basic method of calculating interest. However, the actual calculation may vary institutionally depending on the day count basis and specific transaction considerations. Important point to notice here when you make a payment it is first used to settle any cash advances, fees, and interest charges before being applied to other outstanding balances.
When does interest start on a Cash Advance?
Interest starts right away; from the moment you withdraw the money.
There is no grace period like you get for normal card purchases.
Is the interest rate higher for Cash Advances?
Some banks/finance companies charge a higher rate than regular Credit Card purchases.
Should I avoid using Cash Advances too often?
Yes. Because they are expensive.
You pay:
- A withdrawal fee (typically referred to as a Cash Advance Fee)
- Higher interest rates
- Interest from day one
Frequent Cash Advances can make your Credit Card bill much bigger than expected.
Rewards and Benefits
What are Reward Points, Cashback, and other benefits on a Credit Card?
Special offers are given by banks/finance companies to encourage you to use your Credit Card.
- Reward Points
- Reward Points are points you earn every time you use your Credit Card to buy something.
- You can later use these points to get gifts, shopping vouchers, discounts, or even reduce your Credit Card bill (depending on the bank’s/finance company’s reward program).
- Cashback
- Cashback means the bank/finance company gives back a small percentage of the money you spend.
- This money is added back to your card account as cash or credit which you can use later.
- Other benefits
- Some Credit Cards also give special privileges such as:
- Free or discounted travel insurance
- Access to airport lounges
- Discounts at restaurants/ hotel stays
- Exclusive offers with partner shops
- Zero-interest installment plans (but may be charged a handling fee)
Do all cards offer the same benefits?
No. Benefits depend on the card type and the bank/finance company. Each card comes with its own terms and conditions related to its benefits.
Safety and Security
Can someone misuse my Credit Card?
Yes. Credit Cards are commonly targeted by fraudsters.
What are the main types of Credit Card fraud?
There are two main types:
- Online fraud – when someone steals your card details and uses them on the internet.
- Physical fraud – when someone uses your stolen card at a shop or point of sale (POS) machine.
What happens if fraud happens online?
If your card details are misused online, you need to lodge a complaint, and then your bank/finance company will investigate.
If your complaint is genuine, they may help you recover your money through a process called a chargeback.
What happens if my lost or stolen card is used at a shop before I report it to the bank/finance company?
If someone uses your physical card before you report it stolen, you may have to bear the loss. This is because there is no proof that the card was stolen until you officially report it.
How can I protect myself from Credit Card fraud?
- Keep your card safe.
- Do not share your card number, PIN, or OTP.
- Use your card only on trusted websites.
- Regularly check your transactions.
- Report your lost card immediately.
Being alert is the best way to prevent fraud before it happens.
Is an OTP always sent for every online Credit Card transaction?
No. Not all online payments ask for an OTP. It depends on the website or app you are paying.
Why do some websites not ask for OTP?
Some sellers remove OTP steps to make the checkout faster and easier for customers.
Is it safe to pay on websites that don’t ask for an OTP?
It’s less safe. If possible, avoid paying on websites or apps that do not request an OTP.
What should I do for my safety?
Always choose online vendors that ask for an OTP before completing the payment. It adds an extra layer of protection against fraud. Never save your card details on websites.
What to do if I notice a disputed transaction?
If you notice a transaction on your Credit Card that you do not recognize, check your records first to confirm it wasn’t made by you or an authorized user. If it still appears suspicious, contact your bank/finance company immediately through its hotline or customer service to report the dispute. Provide the transaction details, such as date, amount, and merchant name, to assist in the investigation. The bank/finance company will review the case and may advise you to block or replace your card for security reasons.
Other Information
Can I use my Credit Card to pay at fuel stations?
Yes, but some banks/finance companies may charge a commission, typically around 1%.
Is it okay to have multiple Credit Cards?
Yes. It can be convenient.
What happens if I have multiple Credit Cards?
Your ability to obtain loans from banks/finance companies may get adversely affected.
How?
If you are not careful, having several cards can harm your credit score (CRIB rating). This can happen if you:
- Miss payments
- Use too much of your credit limit
- Struggle to manage all the cards properly
A low credit score makes it harder to get a loan.
What should I keep in mind before getting many Credit Cards?
If you want to keep a good credit score for future loans or financial needs, think carefully before applying for or using multiple cards. Make sure there is a real need for credit and that you manage it responsibly.
What is a supplementary card?
It is an additional Credit Card issued under your account for use by another person, such as one of your family members.
Is it issued under my name?
No. It is issued under the other person’s name.
Will that have a separate credit limit?
No. Your credit limit will be shared by you and your supplementary card holder.
Will supplementary card holder get another statement?
No. their spending appears on your monthly statement.
Who is responsible for supplementary card spending?
You are fully responsible for repaying the total outstanding balance.
What happens if the supplementary card holder does not pay?
Any delays or mis-payments will affect your credit record adversely.