Part II
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Credit Limit
According to different PR of consumer lending, an individual can borrow up to PKR 500,000/- clean financing from one single product of the bank.

Platform
Credit cards are mainly on two platforms in addition to American Express (AMEX). Master card due to its low transactional cost has low markup rates as compare to visa & Amex.

Operations of Credit Card
Once approved the banks sends the limit letter along with inactivated card. Different banks have different billing dates and if paid within the due date, interest expense would be nil.

Payment Options
Payment can be made through cash at the branch counter of issuing banking, but it is usually discouraged by applying counter charges of PKR 100-200/-

Understanding Costs/hidden Charges
Charges pertaining to credit cars are broken down into four categories.

• Insurance Cover

• Interest Expense

• Annual Fees

• Terms and Conditions Fee

Insurance Cover
To cover basic incidental/life loss risk associated with customers, bank by default has its credit protected by insurance companies. Premiums are being charged through customers in their bill

Interest Expense/Mark Up
Interest expense also known as mark up is applied on the utilized amount. Prevailing interest rates in Pakistan are around 24%-26% as risk with individual lending is relatively on the high side.

Annual Fee
Annual fees are charged to extend the facility. At times it is waived off due to customer profile.

Terms and Conditions Fee
Terms and Conditions fee is applicable depending on the type of transactions, e.g., taking cash out from the credit has 1-2% cash advance fee subject to terms and conditions. Late payment charges, over limit charges and

Interest Calculation Method
Usually interest expense/financial charges calculated on daily balance method. According to the method, outstanding balance is daily calculated and is multiplied by1/365 of APR (Annual Percentage Rate)

Major Industry Players

1. Citi Bank (Master+Visa)

2. RSB Bank Limited(Master)

3. Allied Bank (Master)

4. Askari Bank (Master)

5. Standard Chartered(Amex+Visa)

6. MCB Bank (Visa)

7. Bank Al-Falah(Visa)

8. UBL (Visa)