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Credit Card

Credit card, the implausible credit instrument, not only gives you the convenience of access to credit at any point of time but also helps you building a strong credit history and credit score. Today the banks and credit card companies offer various kinds of cards to suit the needs, requirements and tastes of individuals.

Advantages of Credit Card

Convenience – Credit cards can be used for all offline and online purchases throughout the world and at any given point of time.

Security – Acceptance of credit cards for medical and other such expenses gives a sense of security to the card holder

Safety – Recovery of lost cash is nearly impossible. However, if you lose a credit card, all you need to do is inform the card issuing company on their 24x7 customer care center and they block the card instantly. Once informed the card cannot be used.

Interest free loan – If one pays complete amount spent within the due date, he is not charged any interest. This means that a credit card extends an interest free loan for 45 days

Tracking expenses

One can track expenses through the detailed expense statement received from Credit Card Company. This can help one understand and manage their expenses.

Reward program

Variety of reward programs help card holder derives further benefits from their expense. The reward programs vary from exchange of points against merchandise to cash back

Credit Score and Credit Card

Credit score and credit bureau report play an important role in processing of the credit card applications. A few credit card companies do not process the credit card application for underwriting in case the credit score is less than a threshold.

Eligibility Criteria

The credit card companies and banks generally need a minimum income of Rs 25,000 per month to consider an application for credit card. The higher variants of credit cards need a higher income band for an applicant

Documents required

Self-attested copes of income documents (Payslip/Form 16, Income Tax returns etc) and KYC documents (photo id proof and address proof) are required to be submitted by the applicant. Availability of PAN number is mandatory.

Types of credit cards

Regular credit cards – these are vanilla cards where the card holder can buy now and pay later (on or before the due date). These cards come with the flexibility of paying as low as 5% of the total amount due each month in case the card holder finds it difficult to pay the entire due amount in one go.


Reward cards

– These cards primarily extend reward on specific programs. There are cards that extend discount on food bills, specific purchase segments (petrol, utility bills etc) or give higher reward points that could be exchanged for variety of merchandize


Secured cards

These are the cards that are issued against a fixed deposit. Generally a limit of upto 80% of the deposit amount is extended on the card. These can be used like any other regular credit card. These are a good option for individuals with low or zero credit history


Cash back cards

Certain credit card companies offer cash back on the purchases. These could either be a direct credit to the credit card account or could be utilized against the annual fee of card


Frequent fliers/airline cards

These cards are co-branded with specific airlines and the card holder gets variety of benefits from that airline. Frequent flyer points get added to the account on each transaction and can be redeemed against airline tickets


Specialty credit cards

These again are co-branded cards with loyalty programs from various large companies or brands that offer benefits on items purchases from the co-partner of the credit card.

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