Find the Best Credit Cards in India

You can use the credit card at the below-mentioned places to conduct transactions –  

• At point of sale (POS) merchant terminals  
• On online shopping websites, e-wallets, etc. 
• At ATMs to withdraw cash 

About how to use a credit card – it’s simple. 

For processing a card-present transaction such as an ATM cash withdrawal and card-swiped transaction, you need to enter the 4-digit PIN. 

For most of the online transactions, you need to enter your card details. The PIN is seldom asked for online transactions.  

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.  

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 itself.  

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. 

Credit card EMI is one of the useful features offered on credit cards. There are various options to use the EMI facility. 

1. Opt for EMI while transacting  
2. 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.  

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 – Certain credit cards such as travel or Airline cards offer Air Miles to their customers. These miles can be JPMiles, Air India Air Miles, etc. Cardholders can collect these miles and redeem them to avail flight tickets and other travel benefits.

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.

A credit card might look like any other card with number, logos and other information. But are you aware that each element on a credit card has a purpose? This section will help you understand the significance of each and every element printed on the front and rear side of a credit card.

Let's discuss the elements on the front-side of a credit card.

• Credit card number: The 16-digit number is one of the prominent elements of a credit card. If you think it's a random, machine-generated number, you're wrong. Each digit or a set of digits of the number not only provide specific information but are also used to identify the authenticity of the card, just by doing a simple math.

• The logos and names on the credit card: The next prominent components on a credit card are the issuer's logo, the name of the card, card networks such as Visa, MasterCard, RuPay, etc., the cardholder's name, and the validity date.

• The chip and the contactless icon: These are the new entrants, we can say. With the Reserve Bank of India (RBI) mandating the conversion of all magnetic stripe-only cards into EMV-chip-based cards, all the new credit cards issued after 31 January 2016 are chip based. If your card is upgraded, you can see an EMV chip on the front side.

Another latest feature that has been introduced by credit card issuers is the contactless payment feature. If your card has the feature, you will find a symbol similar to a Wi-Fi symbol on your card.

Now let's move on to the back-side of a credit card.

• Magnetic stripe: Despite the introduction of EMV chip-based cards, the magnetic stripe, which carries all the crucial account information, still exists till the time all the retail terminals in India are upgraded to accept chip-based cards. This means, even though you receive a credit card very recently, it's likely that you will see both chip and stripe on your card.

• CVV: The CVV or Card Verification Value is a security code that is used as a fraud-prevention tool. The CVV is typically used for online or card-not-present transactions. While VISA and MasterCards have 3 digits in the CVV, Amex has 4 digits.

• Signature box, hologram, and others: The signature box is another security feature on a credit card. Every cardholder needs to sign in the box to make the card legally valid. In case suspicious cases, the signature on the card will be cross verified with other signature proofs the cardholders carry.

The hologram is the glittering little sticker that prevents physical copying of the card. It contains various layers with images imprinted at different angles. Its design makes it hard to copy using a scanner or other instrument. Hence, it also acts as another security feature on the card.

Q.Difference between a credit card and a debit card?

A. While a debit card acts as an instrument to withdraw money from your savings account or to make card-based transactions using the amount in your account, a credit card is a credit instrument that allows you to spend using the card and repay it later.

Q.Should I pay interest on all the purchases I make using a credit card?

A.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.

Q. Can I use my credit card in other countries?

A.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.

Q.Difference between a VISA credit card and a Master Credit Card?

A.VISA and MasterCard are two leading payment gateway providers in India. Any credit card issued in India is either VISA-powered or MasterCard-powered or powered by any other payment network. From the cardholder point of view, there is no much difference. However, VISA and MasterCard may provide slightly different offers on each credit card.

Q.How many credit cards should I have?

A. 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. Use them responsibly, repay the outstanding on time and make sure none of them is affecting your credit score.

Q.How long does it take to get a credit card approved?

A. 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.

Q.What is a secured credit card?

A. A secured credit card is typically issued against a fixed deposit with the bank. The amount in the FD account serves as a security deposit in case the cardholder defaults on the credit card. Secured credit cards are ideal for those without any credit history and for those who are availing the credit card for the first time.

Q.What does 'minimum due' mean on a credit card statement?

A. 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. Paying the minimum amount would save you from the late payment fee.

Q.Difference between credit limit and cash limit?

A. The credit limit is the total credit allotted for your credit card at the time of issuance. At any given point, you cannot spend beyond that limit.

On the other hand, cash limit is the maximum amount of credit available for cash withdrawal on the credit card. Typically, it’s a portion of the total credit limit on the card.

Q.If I make a late payment on my credit card, will it affect my credit score?

A. 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.

Q.Do credit cards offer protection against fraud?

A. 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.