What is a credit card and How does it Work?
A credit card is a card issued by banks which will enable you to access your “credit limit" determined by the issuing authority and this credit will serve as a loan for you. When it comes to a credit card, instead of providing you with the entire loan amount in cash, the bank will allow you take as much as the credit limit on your credit card and you will have a fixed date on which you will have to repay the amount.
When you swipe the credit card and make a transaction, the shop’s credit card terminal asks the credit card issuer if your credit the card is a valid one and if you actually have enough of credit available to make the purchase. The card issuer will then send a message confirming that the acceptance or rejection of the transaction which you have made.
A Guide to Credit Cards
Although most of us are quite familiar with credit cards and use them on a regular basis, there're many aspects of the cards, most of which are quite basic, about which we are quite ignorant about. This section discusses all such things every credit card user must know.
Why is a Credit Card Important?
- To manage your short-term financial needs - your salary won't be sufficient always.
- To enjoy interest-free credit - You pay interest on a credit card only when the due amount is not repaid on time.
- Ease of use - Ready cash for sudden expenses.
- And the perks that come along - Reward points, discounts,cash-backs, offers air miles and lot more.
Benefits of a Credit Card
Welcome Gift – Many banks offer a welcome gift to new credit card applicants once the card is issued to them. This gift can be in the form of bonus points, gift vouchers, discounts, etc. The welcome gift differs depending on the card and the bank.
Rewards Program – All credit cards generally have a reward program, which allows cardholders to earn reward points on every transaction they make using their cards. The amount of points that cardholders can earn per transaction is fixed and differs from card to card. The points that card members collect can be redeemed for various gifts that are listed in the rewards catalogue of the cards. These gifts can be discounts, product, services, cashback offers, etc. Some credit cards allow card members to redeem their points against air miles and cash as well.
Fuel Surcharge Waiver – Many banks offer fuel surcharge waiver to credit cardholders when they spend specific amount of money on fuel every month. This offer is available on fuel transactions made at all Indian petrol bunks.
Cashback Benefits – There are certain credit cards that offer cashback benefits to the customers. The amount of cashback that will be offered depends on the provider.
Lifestyle Benefits – Cardholders can enjoy various lifestyle benefits on their credit cards. Lifestyle benefits include dining, shopping, golf, wellness, entertainment, etc. privileges.
Travel Benefits – This is one of the major reasons for credit cards being so popular among people. There are some credit cards that offer amazing travel benefits to the customers. Travel benefits include air miles, airport lounge access, travel insurance, airline offers, hotel offers, etc.
Airport Lounge Access – Some credit cards offer complimentary airport lounge access to the cardholders. The offer varies from one bank to another. Some banks put a limit on the number of visits, while some others allow access only to Indian airport lounges.
Exclusive Privileges from Visa/American Express/MasterCard – Visa, MasterCard and American Express are three popular and recognized credit card variants. Depending on the variant of your card, you can enjoy exclusive lifestyle, travel, etc. offers from MasterCard/Visa/American Express.
Add-on Cards – Many banks allow their credit cardholders to apply for add-on cards for their immediate family members. Most card issuers offer add-on cards for free, but some of them limit the amount of add-on cards that one can apply for. Cardholders can enjoy all the privileges of their primary cards on their add-on cards.
Air Miles – Cardholders can collect these miles and redeem them to avail flight tickets and other travel benefits.
Features of a Credit Card
Banks offer amazing features on their credit cards. These features vary depending on the card provider and the type of credit card that people purchase. Some of them are as follows:
Reward Points Program: Most credit cards offer a reward points program, which allows cardholders to earn reward points on every transaction they make using their cards. A few exceptions to it is that fuel transactions, insurance payments, gold or gold jewellery purchases, utility bill payments, cash and EMI transactions are typically not eligible for reward points.
The accrued reward points can be redeemed for various options offered in exclusive rewards catalogues provided by the issuers. However, card members need to earn minimum reward points before going for redemption.
Airport Lounge Access: Complimentary airport lounge access and membership to Priority Pass Program are one of the most common features offered on most credit cards. Though you may not find the features on a basic credit card, most next to basic credit card offers complimentary lounge access with a limited number of visits per year, free membership to airport priority pass programs and others. With such a feature on credit card, members can enjoy free lounge visits to both domestic and international airports.
Fuel Surcharge Waiver: Another common aspect offered on most credit cards is the fuel surcharge waiver facility that waives off the 1% surcharge that is typically charged on all card transactions conducted at petrol stations.
Insurance Coverage: While some premier cards provide a comprehensive insurance policy that provides coverage against air accident, life, lost baggage, lost card, outstanding, etc. On other cards, the cover is limited to a few aspects.
Global Acceptance: Today, most credit cards that are issued in India are international cards and are accepted by various merchants all over the world.
Balance Transfer: Credit cardholders can transfer the outstanding balance of their existing cards issued by one bank to the credit card account of another bank. Doing so helps them in saving money and repaying the amount at a low rate of interest. Banks offer various balance transfer options to their cardholders allowing them to repay the amount on a monthly basis within a tenure of their choice.
EMI Conversion: The feature allows the credit card members to convert their credit card transaction into easy monthly instalments (EMI). They can either choose to convert the total outstanding on their card into EMI, a specific transaction, especially big-ticket purchases into EMI and can also convert merchant transactions into EMI.Generally, these plans have very attractive interest rates and different repayment tenures. The EMI conversion will be done with no other documentation and most of the times instant.
Lifestyle Benefits: By partnering with various merchants, credit card issuers provide attractive discounts and offers on various lifestyle categories including dining, shopping, travel, wellness, entertainment, etc.
Travel Benefits: Frequent travellers can make the best use of the travel credit cards that provide travel-related benefits to the cardholders. Some of the common benefits offered on travel credit cards include air miles accrual and redemption for air tickets, free travel insurance, discount offers on domestic and international flights, complimentary lounge visits, discounts on hotel booking, and concierge services.
Credit Card Eligibility
Wondering if you are eligible for a credit card? Check out the eligibility criteria for credit cards. Do keep in mind though that depending on the type of card you are applying for and the issuing bank, the criteria may differ.
In general, here are the eligibility criteria:
- Nationality: You should be a citizen of India or a non-resident Indian (some banks extend credit cards to NRIs).
- Age: You should be at least 18 years old. In some cases, the minimum age to apply for a credit card is 21 years.
- Employment status: You have to either be salaried or self-employed and have a steady source of income.
- Income: Most banks will require you to meet their minimum income requirement before they approve your card application.
- Credit score: A good CIBIL score, with no history if default goes a long way in making sure that your credit card application is approved.
How to Find the Right Credit Card
So, how do you go about finding a credit card that is just right for you? Here's a handy list:
- Your spending pattern: Do you spend more on groceries each month and less on dining? Then get a card that rewards your grocery spends. If a major portion of your income goes towards online transactions, get a card that rewards those transactions.
- The reward type: Credit cards offer rewards in terms of cashback (which you can use to offset your bill), rewards points (which can be used to redeem lifestyle, travel, retail, and dining vouchers), and air miles (which can be transferred to your preferred airline's frequent flyer programme and help fund the tickets for your next holiday).
- Fees and charges: Compare the interest rate on different cards and the fees and charges apply. Look for a card whose joining fee and the annual fee you can afford. Also, see if there are any hidden charges.
- Offers on the card: Some cards have great offers and discounts when you use the card to shop on a particular website or when you use it at a particular store. Some offer great dining discounts and others are better suited for travel. Make sure you go through the offers available on the card before making your decision.
- Welcome bonus or gift: To get you to apply for their card, banks offer welcome gifts and bonuses. This could be the latest gadget or bonus points and miles. If you are looking to earn rewards at an accelerated pace, look for a card that offers a considerably large welcome bonus.
- Payment options: Most cards will allow you to make payments via multiple channels. In general, if you tend to forget to make payments by the due date, you should consider having your credit card payments automatically debited from your account.
If you keep these points in mind, getting the right credit card shouldn't be too much of a problem.
Documents Required to Apply for a Credit Card
Applicants can submit any one of the ID proof, address proof and income proof documents listed below
| Passport |
Telephone Bill |
Certified Financials |
Salary Certificate |
| PAN Card |
Electricity Bill |
Recent ITR Statement |
Recent Salary slip/s |
| Ration Card |
Aadhaar Card |
Passport |
Employment Letter |
Different Types of Credit Cards in India
Apply for a Credit Card
Gone are the days where you had to trudge to the bank to apply for a credit card. Today, applying for one is extremely simple. All you need is an internet connection. If you have that, you can apply for a credit card online.
How to Apply for Credit Card Online?
Applying for a credit card online is as easy as booking a movie ticket online. Here are the steps:
- Visit the bank's website.
- Take a look at the credit cards offered by the bank.
- If the bank has a comparison tool, use it to see how each card compares to the other.
- Select the credit card that is the right one for you and hit the 'Apply' button.
- Fill in the required details and upload all necessary documents.
- Submit your form.
And that's it. It really is that simple.
Note: Each bank may have a different application procedure. Visit the bank's website for more details regarding how to apply for their credit card online.
Compare & Apply Credit Card on BankBazaar by Following 4 Simple Steps:
- Step 1 - Compare credit card offers
- Step 2 - Select from the top credit cards offered by leading Indian banks
- Step 3 - Check your eligibility by entering a few personal details
- Step 4 - Enjoy instant approval online after filling out your application form
Benefits Of Applying For Credit Card On Bankbazaar
BankBazaar offers end-to-end application process, wherein you can browse through most of the credit cards offered by various banks, compare and apply for the best credit card in just a few clicks.
Let's look at the perks that we offer for applying for a credit card through us.
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Robust comparison tool: Before availing a credit card, it is always advisable to compare various cards to find the best. But the process of comparing is not that easy, and a lot of people tend to avoid it, ending up with a wrong card. To solve this problem, BankBazaar introduced a platform where people can compare credit cards offered by different banks online at one place. This not only helps them in making an informed decision but also in getting the best credit card available in India.
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We simplify the application process: With our end-to-end paperless online application process, we have simplified the entire application process in a few simple steps. You don't have to visit the bank branch nor have to meet any bank representative to apply for a credit card. Simply, visit our website, compare various credit cards, choose one and apply for the same without leaving the comfort of home.
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24x7 Support: Apart from the above, BankBazaar provides 24x7 support to all its customers throughout the year.
Different Types of Credit Cards Offered by Bankbazaar
Not everyone needs a same credit card. While some consider it as a line of credit, a few consider it as an instrument to track their expenses and for some others it's a way to get best deals on every purchase.
Today's customer-centric market has thus come with a solution for all - A credit card for every need. The partnership between card issuers and retailers made the categorization even simpler. From shopping to travel to dining to rewards, there are cards for each category.
The name says it all - Shopping Credit Cards are designed for shopaholics or frequent shoppers. While some cards provide deals and discounts for shopping online, others are designed for in-store shopping. Further, there are co-branded Shopping credit cards that provide offers and rewards on specific brands or stores.
Shopping Credit Cards are typically affordable with a starting annual fee of Rs.500. The benefits offered on the cards including the welcome gifts, reward points, deals and discounts, etc., revolve round the shopping category.
SimplySAVE SBI Card
- Joining fee - Rs.499; Annual fee - Rs.499 (Waived if the total spends exceed Rs.1 lakh).
- 2,000 bonus reward points on spending Rs.2,000 or more in the first 60 days of card issuance.
- 10 reward points on spends related to movies, dining, grocery, and departmental store.
- 1% fuel surcharge waiver for transactions between Rs.500 and Rs.3,000.
Axis Bank Buzz Credit Card
- Joining fee- Rs.750; Annual fee- Rs.750.
- Welcomes on board with Flipkart gift voucher worth Rs.1,000
- Up to 10% discount on Flipkart.com valid from 1-5 of every month.
- 5% instant discount on Flipart.com from 6-31 of every month.
Kotak Essentia Platinum Credit Card
- Joining fee- Rs.1,499; Annual fee- Rs.749.
- Up to 10 reward points for every Rs.100 spent at grocery and departmental stores.
- Access to priority customer service with ASSIST
- 6 free PVR tickets or 1,200 reward points for spends over Rs.1.25 lakh in 6 months.
Lifestyle Credit Cards
A lifestyle credit card is an "All-in-one" credit card that provides privileges across categories. From shopping to travel, rewards to cashback, entertainment to dining, you can enjoy special offers and discounts on most of them.
The Lifestyle Credit Cards typically come with a high annual fee and joining fee, which of course, is worth spending for the privileges offered by the cards. Some Lifestyle Credit Cards also have low or no annual fee and are designed for low-income group individuals.
HDFC Bank Regalia Credit Card
- Joining fee - Rs.0, if you apply on Bankbazaar.com or Rs.2,500.
- Annual fee - Rs.2,500 (Waived if the total spends exceed Rs.3 lakh)
- Welcomes on board with 2,500 reward points.
- Complimentary Priority Pass Membership providing access to more than 700 airport lounges.
- 15% discount on dining spends at premium restaurants across India.
- 24X7 concierge assistance for travel and entertainment bookings.
- 12 free lounge visits per year to domestic airports.
SBI Card Prime
- Joining fee - Rs.2,999; Annual fee - Rs.2,999 (Waived if the total spends exceed Rs.3 lakh).
- Welcomes on board with a complimentary e-gift voucher worth Rs.3,000 from partner brands.
- 20 reward points on utility bill payments, spends at partner stores, dining, grocery, and movies.
- Free membership to Trident Privilege Red Tier Programme that provides exclusive benefits on hotel stays.
- Complimentary membership to Club Vistara Silver tier.
- 8 free domestic airport lounge visits and 4 international lounge visits per year.
- 20 reward points for every Rs.100 spent on your birthday.
Axis MY Zone Credit Card
- Joining fee - Rs.500 (Waived on the spends of Rs.5,000 in first 45 days); Annual fee - Rs.500.
- 25% cash back on movie ticket bookings.
- 1 free airport lounge access per quarter to domestic airports
- Up to 20% off on dining at partner restuarants in India.
- 4 reward points for every Rs.200 spent.
HSBC Visa Platinum Credit Card
- Joining Fee - Nil
- Annual Fee - Nil
- Introductory offer includes vouchers worth Rs.2,250 until 5 May 2020.
- 10% cashback of up to Rs.2,000 on spending Rs.10,000 within the first 90 days of card issuance.
- BookMyShow voucher of Rs.500.
YES Bank Premia Credit Card
- First year membership fee of Rs.1,500 waived off if applied through BankBazaar.
- No annual fee when applied through BankBazaar, if not Rs.1,500.
- 25% on movie tickets booked on the BookMyShow app or website.
- Priority Pass Membership and MasterCard program includes 2 domestic lounge visits per quarter.
- Enjoy discounts and offers on dining at partner restaurants all over the country.
- 4 Green Fee waivers at top golf courses in India.
Fuel isn’t Expensive with Fuel Credit Cards:
Partnered with major industry players like Hindustan Petroleum (HP), Bharat Petroleum (BPCL), Indian Oil, etc., credit card issuers are offering Fuel credit cards loaded with partner-specific benefits. Fuel credit cards provide accelerated reward points on fuel spends, fuel surcharge waiver facility, reward points redemption against fuel purchases, and other value back benefits, enabling the users to keep the fuel costs under check.
BPCL SBI Credit Card
- Joining Fee: 500. Renewal Fee: Rs.500. Waived if the total spends in the previous year equal Rs.50,000.
- 5X reward point on other transactions like shopping or dining.
- 4.25% ValueBack + 1% fuel surcharge waiver at any BCPL Petrol Pump in the country.
- Redeem reward points instantly for fuel purchases at IndianOil outlets.
Indianoil Citi Platinum Credit Card
- Joining fee: Rs.499; Annual fee: Rs.499 (From 2nd year). Waived if the total spends in a year is Rs.50,000 or more.
- 4 turbo points on every Rs.150 spent on fuel at authorised IndianOil outlets.
- 2 turbo points on every Rs.150 spent at grocery and supermarkets.
SimplySAVE SBI Card
- 1st year fee on the card is Rs.499.
- Renewal fee of Rs.499 is waived off if annual spends are more than Rs.90,000 when applied through BankBazaar.
- Enjoy 10X reward points on dining and movie spends.
- Avail 10X reward points on purchases made at departmental and grocery stores.
- Get a 1% fuel surcharge waiver at any petrol pump for transactions between Rs.500 - Rs.3,000.
Axis MY Zone Credit Card
- 1st year fee of Rs.500 is waived if Rs.5,000 is spent within 45 days when applied through BankBazaar.
- 2nd year fee of the card is Rs.500.
- Enjoy a cashback of 25% on movie ticket bookings.
- Avail complimentary airport lounge access at major domestic airports.
- For every Rs.200 spent on the card, get 4 reward points.
- Avail a 1% fuel surcharge waiver across all fuel stations in the country.
Reward Credit Cards - Get Rewarded while you Shop:
Rewards Credit Cards offer accelerated rewards on most of the spending categories. Credit Card issuers are providing a wide variety of redemption options ranging from gifts to air miles to cashback. Reward Credit Card also provide welcome rewards, bonus rewards, milestone rewards, etc., in terms of reward points. Most of the cards offer reward points with unlimited validity.
Citi Rewards Credit Card
- Up to 2,500 bonus points within 60 days of card issuance as part of welcome rewards.
- 10 reward points on apparel and departmental store spends.
- Up to 300 bonus reward points on spends more than Rs.30,000 in a month.
- Reward points can be redeemed instantly for fuel, in-store shopping, online shopping, air miles, cash back, etc.
IndusInd Platinum Credit card
- Zero 1st-year and 2nd- year fees if applied through BankBazaar.
- Avail best-in-class insurance benefits
- Fuel surcharge on all petrol-pumps all over the country
- Movie ticket benefits twice a month from Sathyam Cinemas and 1 free movie ticket from BookMyShow.
- 1 complimentary golf session per quarter.
- Priority Pass Membership
YES First Preferred Credit Card
- No annual fee is charged if applied through BankBazaar, if not Rs.2,500.
- Renewal fee waived off if applied from BankBazaar, if not Rs. 2,500.
- Make the most of 15,000 reward points received on your first transaction within 3 months.
- Enjoy a renewal benefit of 10,000 reward points with each renewal.
- With the Priority Pass Membership and MasterCard program, get 4 complimentary lounge visits per year.
- Avail discounts and offers with purchasing a wide range from products through YesRewardz.
Cashback Credit Cards (Earn while you spend):
Cashback credit cards offer cash back, cash rebates, and other money-saving benefits on most of the credit card spends. While some care offer cashback in the form of reward points others offer direct cashback to the credit card account which can be used to pay off the card outstanding.
HDFC MoneyBack Credit Card
- Joining fee:Rs.500 Renewal fee:Rs.500 (from 2nd year onwards).
- 2 reward points on every Rs.150 spent online.
- Spend Rs.50,000 in a quarter and get e-voucher worth Rs.500.
- Free accidental death insurance up to Rs.50 lakh.
- Reward points can be redeemed for cashback against card outstanding (100 reward points = Rs.20).
Citi Cashback Card
- Joining Fee: Rs.500; Renewal Fee: Rs.500.
- 5% cashback on movie ticket bookings.
- 5% cashback on all telephone bill payments.
- 5% cashback on all utility bill payments made through Citibank online Bill Pay Facility.
- 0.5% cashback on all other spends.
- Cashback credited automatically as statement credit in multiple of Rs.500.
Axis Bank Neo Credit Card
- Annual fee of Rs.250 will be charged.
- Joining fee of Rs.250 will be waived off if Rs.2,500 or more is spent within 45 days.
- Earn eDGE loyalty reward points with each transaction made with the card.
- Get an Amazon gift voucher of Rs.250 on your first transaction with the card.
- Avail a 15% discount on dining at all partner restaurants in the country.
- Make the most of cashback offers on spends made with the credit card.
Travel Credit Cards – Make your Holidays Budget-friendly:
Mostly providing air travel benefits, the Airline Credit Cards are best suited for frequent travelers. The features and benefits offered on the cards revolve around the air travel. Reward points to air mile conversion, free flight tickets, complimentary airport lounge access, and accelerated rewards on air ticket booking, among others are some common features offered by Travel Credit Cards.
Most of the Travel Credit Cards are co-branded cards offered in collaboration of the card issuer and an Air Carrier or Travel Website. The annual fee of the cards ranges from Rs.500 to Rs.5,000 depending on the benefits they offer.
Yatra SBI Card
- Joining fee - Rs.499; Annual fee - Rs.499 (Waived if the total spends exceed Rs.1 lakh)
- Welcome gift voucher of Rs.8,250 from Yatra.com
- Up to Rs.4,000 off on flight ticket bookings made through Yatra.com
- 20% off on hotel bookings made within India through Yatra.
Air India SBI Signature Card
- Joining fee - Rs.1,499; Annual fee - Rs.1,499.
- 2,000 bonus reward points on every renewal.
- Welcome voucher worth up to Rs.8,250 from Yatra.com on joining.
- Up to Rs.1,000 on domestic flight bookings for a minimum transaction amount of up to Rs.5,000.
- Rs.4,000 off on international flight bookings for a minimum booking amount of Rs.40,000.
- Discount of 20% given on domestic hotel bookings on a minimum booking amount of Rs.3,000.
- 6 reward points for every Rs. 100 spent on departmental store, dining, grocery, movies and entertainment, and international spends.
JetPrivilege HDFC Bank Diners Club
- Joining fee - Rs.10,000; Annual fee - Rs.5,000 (Waived if the total spends in a year equals Rs.8 lakh).
- Welcomes aboard with up to 30,000 bonus Intermiles.
- Get 8 InterMiles for every Rs.150 spent on retail expenses.
- For every Rs.150 spent on every flight ticket booked on www.intermiles.com, get 16 InterMiles.
- Unlimited complimentary golf games and lessons across the globe.
- Personalised 24x7 concierge services for all your bookings.
AXIS Bank Miles & More World Credit Card
- Joining fee - Rs.3,500; Annual fee - Rs.3,500.
- Welcomes aboard with award miles and complimentary Priority Pass Membership.
- Up to 55,000 miles can be earned in the first membership year.
- 4 free visits per quarter to MasterCard lounges within India.
- 2 free visits per year to priority pass lounges across the globe.
- 24X7 concierge services to assist flight ticket bookings, gift deliveries, event bookings, etc.
- Complimentary travel insurance that covers lost baggage, loss of card, and air accidents.
Citi PremierMiles Credit Card
- 10,000 free Miles on the first spend made within 60 days of card issuance.
- 10 Miles per Rs.100 spent on flight and hotel bookings made through PremierMiles website.
- Complimentary access to select airport lounges within India.
Credit Card Tips
Keep a check on Joining and Annual fee
Almost all credit cards have a joining fee and annual fee. It is important that you keep a look out for these fees. A joining fee is the fee which needs to be paid to get the credit card and an annual fee is a sum of money to be paid at the end of each year.
Annual fee and joining fee are minimal for the basic credit cards and the more benefits a card offers, the annual and joining fee increases. Many cards offer a waiver of annual fee if you spend a certain sum of money in a year. All in all, the benefits of the card must be greater than the fee of the card.
Things to know before Applying for Credit Card
Credit Card Statement
Credit card statement (or credit card bill) is generated every 30/31 days. The bill generation date depends on the date on which the credit card is first issued, and the same date will be followed for the subsequent months.
Besides the bill amount which is also called the outstanding amount on the card, the statement also provides a detailed history of all the transactions conducted during the billing period.
It also reflects the total credit limit, available credit limit, cash limit, due date and other related information.
The statement is typically mailed to the cardholder’s registered e-mail every month. However, if the total outstanding balance is less than a certain cut-off, say Rs.200, no statement will be generated.
Your credit card comes with a pre-assigned credit limit. This limit is the total amount you can charge to your card. For example, if your credit card provider says that the credit limit on your card is Rs.25,000, it means that you can make transactions up to a total of Rs.25,000 using your card.
Each time you swipe your card, the amount is deducted from the total credit limit and each time you pay your bill, your credit limit increases by that amount.
Here's what affects your credit limit:
- Income: Your monthly or annual income will be taken into consideration while determining your credit card limit. Based on the type of credit card you apply for, the income requirement will differ.
- Type of card: Premium cards tend to come with a higher credit limit when compared to entry-level cards.
- Debt-to-income ratio: This ratio compares the total amount of debt you currently have to your total income. The higher the ratio, the more debt you currently have, lower the credit limit, and vice versa.
- Limit on other cards: If you already own a credit card, the credit limit on your new card may be the same amount.
- Credit history: Good credit history means you are financially responsible. As such, the credit limit on your card will be higher when compared to those with poor credit history.
When you don’t pay the total outstanding amount on a credit card by the due date, you’re automatically opting for the revolving credit facility. This means the borrowed amount which is not repaid on time attracts interest or finance charge.
The interest charge is also applicable when you pay only the minimum amount due or anything less than the total amount due.
Further, cash withdrawals attract interest from the date of the transaction till the amount is repaid in full.
The interest rate is charged at a monthly percentage rate or an annual percentage rate (APR) and varies from card to card. The issuer will communicate the rate of interest at the time of card issuance.
Interest rates charged by top banks are listed below.
| State Bank of India |
Up to 3.35% per month |
| HDFC Bank |
Up to 3.4% per month |
| IndusInd Bank |
3.83% per month |
| Citibank |
3.50% per month |
| Axis Bank |
2.50% to 3.25% per month |
| Kotak Mahindra Bank |
3.40% per month |
| HSBC Bank |
1.99% to 3.30% per month |
| ICICI Bank |
2.49% per month |
When managed properly, a credit card acts as an interest-free credit line. This means you don’t have to pay any interest if the borrowed amount is repaid in the stipulated time. The period between a transaction date and the credit card bill payment due date is called the ‘Interest-Free Period’.
If you pay the transaction amount on or before the due date, you don’t have to pay any interest, hence the in-between period is termed as Interest-free period or grace period.
The grace period varies for each credit card transaction and the typical period ranges from 30 to 45 days. Transactions carried out at the beginning of your credit card billing cycle would provide you with a longer grace-period.
However, the grace period is not applicable if the previous month's due has not been paid in full. Also, cash withdrawals using a credit card are not eligible for grace period. Interest on such transactions would be levied from the withdrawal date itsel
The interest-free period offered by top banks is as follows
| State Bank of India |
20 to 50 days |
| HDFC Bank |
20 to 50 days |
| IndusInd Bank |
Up to 50 days |
| Citibank |
Up to 50 days |
| Axis Bank |
20 to 50 days |
| Kotak Mahindra Bank |
Up to 48 days |
| HSBC Bank |
Up to 52 days |
| ICICI Bank |
18 to 48 days |
Credit card EMI is one of the useful features offered on credit cards. There are various options to use the EMI facility.
- Opt for EMI while transacting
- Convert to EMI after the transaction
Credit cardholders with the first option can convert their purchases instantly into EMI while carrying out a transaction. However, the product/service or the retailer should have partnered with the card issuer.
The second option allows the users to convert any of the transactions or the total outstanding on the card into easy monthly installments (EMI).
However, the request for conversion should be made within a specific period from the date of the transaction, say 20-30 days.
While availing the facility, cardholders have the option to choose the repayment period which typically ranges from 3 to 24 months.
Some issuers offer 0% interest while the others charge a low or normal interest rate. Furthermore, a processing fee of 1-2% of the converted amount may also be levied.
Once you opt for the facility, you need to repay the EMI amount every month. The associated principal amount and the interest charge, if applicable, will be added to the minimum amount due on the card.
Credit Card FAQ's (Frequently Asked Questions)
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What is the difference between a debit and a credit card?
A debit card draws money from your account immediately when you make a purchase. Whereas a credit card enables you to borrow the money required against credit and you will have to pay the bank when you receive your credit card bill.
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What is credit card limit?
This is the maximum amount that one can spend on their card. When you have a high limit for the credit card, it allows you to spend more and this will help your credit scores.
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Can I get a credit card online?
Yes, You can apply for a credit card online, once you go to the website of your preferred bank.
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What is the minimum credit score for a credit card?
A credit score above 650 is ideal to be able to get a credit card
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Can I get a credit card without a job?
Even if you do not have a job and have a pretty substantial inflow into your account every month or so, you are eligible for a credit card.
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Can I get a credit card in one day?
Yes, Due to the online application system, your credit card application will be approved in one day. However, you will not get the physical credit card in one day.
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Do credit cards come with any airport lounge benefits?
Yes, a lot of credit cards come with access to domestic and international lounges at airports.
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Are there any benefits of having a credit card?
Yes, most credit cards come with a reward point system, where you earn a point every time you spend a said amount of money. You can then redeem these points.
- Is it better to apply online or in person for a credit card?
It is much easier to apply for a credit card online. If you are applying for a retail credit card, it is better to go in person and apply for the same.
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What is the minimum salary required to apply for a credit card?
The minimum salary requirement to be able to have a credit card is different for every bank. The figure varies for salaried and self-employed individuals.
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How do credit cards work?
A credit card gives you a line of credit and you can use this to make balance transfers, all kinds of purchases, and cash advances. You will have to pay back the amount by the date specified by the bank. When you use a credit card, you have to keep in mind the minimum payment to made every month by the due date.
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How can I get a credit card for the first time?
If you already have a credit history, you can check your eligibility, choose a card that suits your lifestyle needs and apply for it on Bankbazaar. If you do not have a credit history, you can opt for a secure credit card usually offered against fixed deposits.
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Do credit cards require proof of income?
As your income does not show up on any of the credit reports, many credit card issuers do not verify your income source. However, proof of income could increase the chance of your credit card application being approved.
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Can we get a credit card with bad credit score?
No, you can't get a credit card with bad credit score. However, if you have a credit score between 550 and 650, it might be considered poor credit. In these situations, if banks deem you as a responsible borrower, you might be qualified for an unsecured credit card.
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Which is the best and easiest way to apply for a credit card?
The best and the easiest way to get a credit card is to apply for it on a platform like Bankbazaar. You can compare the features, benefits, fees, interest rates etc. and then choose a card that best suits your needs.
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How long does it take to get a credit card approved?
The banks typically state that they would take 21 days to disburse a credit card. However, depending on the applicant's profile, availability of documents, verification checks, etc., it might also take a little longer than the stipulated time.
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Can I use my credit card in other countries?
It depends on your card type. If your credit card is accepted globally, you can use it in other countries as mentioned by your creditor. However, a certain fee known as the foreign transaction fee will be charged for all the purchases made abroad.
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Do credit cards offer protection against fraud?
Not all credit cards do, but there are quite a few credit cards that come with fraud liability protection cover.If your card offers the protection, most of the fraudulent transactions that might happen on the card when it's either lost or stolen will be covered. However, you need to intimate about the loss of the card immediately to the respective creditor.
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Should I pay interest on all the purchases I make using a credit card?
No, you don't have to pay interest on all the transactions. However, if you're not repaying the due amount within the stipulated time, the unpaid due would attract interest along with all the new transactions, till the due amount is repaid in full.
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Should I get a charge card or credit card?
Having a credit card would mean that you will get small and quick loans while you make your everyday purchases and it offers payment flexibility. If you are a charge cardholder, you will have to pay back the whole amount that you borrow every month on the due date and failure will lead to a heavy fee being charged.
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How many credit cards should I have?
The number, one should own is not fixed. It depends on your financial ability and your spending behavior. However, ensure to manage all the cards properly.
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What does 'minimum due' mean on a credit card statement?
The minimum amount due is the minimum amount a credit cardholder needs to pay in case he/she is not able to pay the total outstanding. It is typically 5% of the total outstanding amount on the card.
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If I make a late payment on my credit card, will it affect my credit score?
It depends on various factors - the number of days late, the number of instances and the amount due. Based on all this your credit card issuer would take a call about whether or not to report the same to the credit agencies. But once reported, it would certainly affect your credit score.
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Do I need to pay processing fee for a loan against credit card?
Yes, banks do charge processing fee for loans against credit card. However, you need to pay a very nominal amount as processing fee.
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Which credit card has highest limit in the world?
Chase Sapphire Preferred® Card has the highest limit of $100,000.
100% PAPERLESS APPROVAL 
No Income Docs Needed 
Credit Card
Credit Card
Credit Card
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