What is Credit Card?

Credit cards often come in handy when you're low on cash or you believe in paying for the monthly expenses in the end rather than making fractional payments, then credit cards are your go-to survivors.
So, credit cards are synonymous with convenience as you're no longer required to carry cash with you as the credit card will help you with both online and offline transactions. Therefore, you can enjoy every penny you spend.

Features Of Credit Card

• Credit cards are a great alternative to cash, allowing the holder to travel and enjoy anywhere without carrying hefty cash or waiting for the online transactions to be successful.
• Helpful in keeping a record of all the transactions, eliminating the need to memorize the expense while filing taxes.
• The credit card holder can also restrict its monthly expenses as the credit cards have defined monthly monetary limits set by the bank or NBFCs.
• Credit cards are handy when travelling abroad or making payments in international currencies (if required). Thus, the traveller moves hassle-free.

Benefits Of Credit Card

• It Eliminates the need to carry cash while travelling anywhere in the world.
• It helps improve your credit score so that you can obtain money in the future effortlessly.
• Easy to track expenses and helps to plan the repayment.
• You can also access discounts and cash backs on fuel services, restaurants, travel, entertainment etc.
• Some banks and financial institutions provide insurance coverage on personal incidents, which is also one of the attractive features of credit cards.
• You may earn reward points on significant purchases and later redeem those reward points.
• You can withdraw cash up to specific limits in financial emergencies, and the banks define the boundary.
• You can buy anything and everything on credit and pay later. Buying on credit is one of the most attractive features of a credit card.
• You can quickly pay your monthly bills like shopping, travel, medical hospitals and more with credit cards.

Applying for a Credit Card

To apply for a credit card online, you can follow the below steps:

• Step 1: Compare all the credit card options available to you.
• Step 2: Select the option that is most viable to you, based on your requirements.
• Step 3: Check your eligibility, and if yes, then fill in the personal details into the credit card application form.
• Step 4: Depending upon your monetary history, you may get instant credit card approval and enjoy the benefits.

Credit Card Fees & Charges

Annual fee: For most cases, it remains the same every year but can vary in some instances or banks. Normal fee ranges from : NIL - ₹50,000*.
Joining fee: Normal fee ranges from : NIL - ₹50,000*.
Late payment charges: when you delay paying the credit card bill up to a specific date. Normal late payment charges ranges from : ₹100- ₹1250.
Interest charges: when you fail to pay the entire credit card bill until the due date and are usually pre-defined. Normal Charges ranges from : 9%*-53%* (PA)
Cash advance fee: The banks charge 3% to 5% of the total cost per cash advance transaction. Normal fees ranges from ₹250-₹500*.
Over-the-limit fee: The issuers charge a nominal fee when you exceed the monthly spending limit of the credit card. Normal Over limit fees starts from 2.5%* ( Minimum of ₹500).
Balance transfer fee: when transferring the debt from one card to another. Normal fees ranges from 1%* - 3%* .
Foreign transaction fee: when you purchase something on foreign land and is typically 3% on every swipe. Normal fees ranges from NIL - 3.5%*.
Returned payment fee: when you schedule a bill repayment but don't have enough money in the account. Normal fees starts from ₹250 - ( 2% of the payment amount subject to Min. ₹450).

Credit Card Eligibility


• Minimum: 21 years or above and 18 in some exceptional cases.
• Maximum: 65 years


• Minimum: 25k Monthly Income

Credit Score

• The potential cardholder must have a CIBIL score of 750 or above.


• Issued to both Indian and Non-Residential Indian (NRI).

Mandatory Documents

• Recent coloured photos
• Photocopy of PAN or Aadhar card

Identity proof

• PAN Card
• Aadhar Card
• Passport
• Driving Licence
• Voter ID

Address Proof

• Registered Rent Agreement or Lease Agreement
• Aadhar card
• Passport
• Ration Card

Income Proof

• Salary Certificate
• Recent salary slip or business continuity proof
• Employment letter
• Form 16 / IT Returns

Pros of Credit Cards

• The convenience of purchasing anything anywhere in the world is the most extensive power of a credit card.
• The better alternative is to stay away from financial frauds.
• A helping hand for the emergency funds such as hospital bills.
• It enables you to make more significant purchases at once and pay later.
• May help in building a good CIBIL score by paying the bills timely.

Cons of Credit Cards

• People tend to overspend money since they lose track of their expenses.
• High-interest rates and late fee charges if you delay paying the credit card bill up to a specific period.
• It can damage your CIBIL score if used carelessly.

Importance of a Credit Card and Tips for Effectively Using Them

A credit card is a perfect example of financial aid, especially in emergencies and also serves as invisible assistance in travel, entertainment, shopping, daily expenses and more. However, with power comes the responsibility, and that's why the tips for effectively using a credit card are below.

• Use only when it's mandatory.
• Avoid using credit cards when paying additional taxes.
• Pay the credit card bill until the due date.
• Try not to utilize the credit limit each month, as it will affect your CIBIL score.
• Paying minimum balance is also one of the appealing features of credit cards as it leads to piling of bills that lead to debts.