Credit Card

• Choose a card that aligns with your lifestyle. Look for benefits in your major spending category like travel, online shopping, offline shopping, etc.
• Identifying the cards which you are eligible for. Beginners or low-income applicants qualify for entry-level cards, while high-net-worth individuals can get premium options.
• Entry-level credit cards come with lower fees whereas mid-range or premium cards generally charge a higher fee. Decide if you would like a low-fee card with basic benefits or pay a higher amount for better benefits.
• Do a cost-benefit analysis, and review t&c on annual fees, rewards capping, redemption options, and values. Ensure you can maximize spend-based benefits before deciding.
• Avoid applying for multiple credit cards at the same time as it may have a negative impact on your credit score.

Pay your balance in full and on time

The most important rule of credit card usage is to pay your balance in full before the due date to avoid interest and protect your credit score. If you cannot make the full payment, try to pay more than the minimum, which can reduce the interest charges.

Convert large purchases into EMIs

If you make a large purchase, consider converting it to EMIs, which usually comes with a lower interest rate than the standard credit card rate. This way, you can manage the entire expense in smaller and more manageable payments over time.

Avoid cash withdrawals with your credit card

Cash advances do not offer an interest-free period; instead, interest is levied as soon as you withdraw cash. These charges can quickly accumulate debt, so use cash withdrawals only as a last resort.

Keep track of your spending

Monitor your spending to stay within your credit limit and avoid building up a difficult-to-manage balance. Check all SMS alerts and your bank statements carefully about credit card transactions. Besides this, you should also check your credit report at regular intervals to notice and rectify any errors.

Do not apply for multiple credit cards at a time

Applying for too many cards at once can make you look credit-hungry and lower your credit score due to multiple hard inquiries. While a single inquiry may not have significant consequences, multiple inquiries within a short period can negatively impact your credit score. Hence, apply only for cards that truly meet your needs and spending habits.

Here are some do’s and don’ts for using your credit cards wisely:

Some recently launched credit cards are:

• HSBC Taj Credit Card: India’s first hotel co-branded credit card in the super-premium segment, with an annual fee of Rs. 1.10 Lakh. Cardholders can earn exclusive privileges not only at Taj properties but also across other hotel chains within the IHCL Group
• Times Black ICICI Bank Credit Card: A premium metal card co-branded with Times Internet Ltd, tailored to meet lifestyle and travel needsft of the premium segment. At an annual fee of Rs. 20,000, this card offers high-end benefits such as unlimited lounge access, milestone benefits worth up to Rs. 70,000, and other exclusive lifestyle benefits
• BOB Tiara Credit Card: An all-rounder credit card designed to cater to various categories such as travel, lifestyle, dining, and more. This card stands out by offering exclusive health and wellness benefits tailored specifically for women. Additionally, it offers travel benefits like unlimited domestic lounge access and a low forex markup fee of 2%
• MakeMyTrip ICICI Credit Card: Suitable fit for travellers who prefer MakeMyTrip for travel bookings. The card offers up to 6% value-back over and above applicable discounts on MakeMyTrip
• KrisFlyer SBI Credit Card Apex: The premium variant of the co-branded credit cards by SBI Card and Singapore Airlines. In comparison to the base variant this card offers 10 KrisFlyer miles for every Rs 200 spent

Credit and debit cards may look similar and sometimes offer similar benefits, but they function differently. Here’s a detailed comparison to help you understand the key differences:

Feature	Credit Card	Debit Card
Function	A short-term loan extended by the card issuer that requires repayment	A means to spend money directly from your savings or current account
Spending Limit	Can spend within the pre-fixed credit limit	Can spend only up to the balance available in the account
Payment Method	Card issuer pays for your purchases, which you repay by the monthly due date	Amount is deducted directly from your bank account
Interest Charges	Interest charges apply in case of late or partial payments	No interest charges are applicable
Rewards & Benefits	Generally offers enhanced rewards, cashback, and other benefits (varies as per the card)	Usually offers basic rewards, cashback, and limited benefits
Credit Score Impact	Directly impacts your credit score	No direct impact on credit score

Credit card fees and charges can vary based on the card type and issuer. Some charges, like joining or annual fees, are required to keep your card active, while others - such as finance charges, cash withdrawal fees, and late payment fees - apply depending on your card usage. Here’s a look at some common charges:

Particular	Charges
Annual Fee	Varies from card to card
Finance Charges	9% p.a. to 52.86% p.a.
Interest-free Period	Up to 50 days
Cash Advance Charges	0% to 3.5%
Forex Markup Fee	0% to 3.5%

Credit Card Interest Rate

Credit card issuers charge an interest rate, also known as finance charges, which is levied in case of late payments or defaults. While the interest rate varies from card to card, it typically ranges between 9% p.a. and 52.86% p.a.

Unlike other card charges, such as joining or annual fees, the interest rate is usage-based and is applied to the outstanding amount whenever you fail to pay your credit card bill in full. Interest is also charged when you make only the minimum due payment. Whenever you carry forward the remaining balance to the next billing cycle, the interest is levied on both the outstanding amount and new purchases from the date of transaction.

Choosing the right credit card is subjective based on your profile and requirements. To make a wise choice, here are some suggestions:

Identify your preferred spending category

There are different types of credit cards, such as travel, shopping, dining, etc. To maximize the benefits of a credit card, you should analyze your shopping habits. The best credit card for you would be one that fulfills your core needs. For instance, if you frequently travel, choosing a credit card that offers accelerated benefits on travel spends would be beneficial for you.

Shortlist cards based on your eligibility 

Once you've identified your shopping pattern, start by shortlisting the cards based on eligibility. Understand your credit profile & find out the cards you may be eligible for. To do so, you can also check your eligibility at Paisabazaar for pre-qualified card offers.

Evaluate features & benefits

After shortlisting the preferred credit cards, the hardest part is to decide which credit card to choose. To find the right card, you must evaluate all the features and benefits of the respective card and choose the one that fits your needs and complements your budget.

Read the fine print

Once you’ve decided which card to apply for, review all the related fees & charges associated with the card. Analyze whether you will be able to pay the associated fees. Apart from the annual fee, also check for other related charges, like interest rates, late payment fees, etc., to make an informed decision.

What are Credit Card Reward Points?

Most credit cards come with a rewards program, allowing you to earn reward points on every spend and redeem them across various categories as per your needs. With a rewards credit card, every time you make a purchase—whether by swiping your card for a PoS transaction or spending online—you earn a certain number of reward points. Some credit cards offer accelerated reward points on specific categories or partnered brands, while others offer the same rewards across all categories. Cardholders can accumulate these reward points and redeem them for vouchers, merchandise, air miles, cash credit, or even convert them into airline or hotel loyalty points as per the card issuer’s policy. While reward points can offer significant savings, one important factor to consider is that most credit cards have an expiration date for their reward points. Typically, reward points expire within 2-3 years from the date of accumulation. Therefore, it is advisable to keep an eye on your reward points and redeem them on time to maximize benefits.

Best Credit Cards for Cashback, Travel, and Rewards

Given below are some of the best credit cards for cashback, travel, and reward points, offering accelerated value back on the respective category and allowing consumers to save on their spends.

Best Cashback Credit Cards

Below are mentioned some of the top cashback credit cards offering benefits across multiple categories:

Credit Card	Annual Fee	Key Feature
YES Bank Paisabazaar PaisaSave Credit Card	Rs. 499 + Taxes	3% Cashback Points on all online spends
Cashback SBI Card	Rs. 999 + Taxes	5% cashback on all online spends
HDFC Millennia Credit Card	Rs. 1,000 + Taxes	5% cashback on Amazon, BookMyShow, Flipkart, Myntra, Zomato & more
Amazon Pay ICICI Credit Card	Nil	Up to 5% cashback on Amazon purchases
Flipkart Axis Bank Credit Card	Rs. 500 + Taxes	5% cashback on transactions at Flipkart and Cleartrip

Best Credit Cards for Travel

Here is a list of the top credit cards for travel, offering value back through EDGE Miles or accelerated value back across travel spends:

Credit Card	Annual Fee	Key Feature
Axis Bank Atlas Credit Card	Rs. 5,000 + Taxes	2.5X EDGE Miles on travel spends
Axis Bank Horizon Credit Card	Rs. 3,000 + Taxes	Up to 5 EDGE Miles per Rs. 100 spent
HSBC TravelOne Credit Card	Rs. 4,999 + Taxes	2X reward points on all travel bookings
HDFC Diners Club Black Credit Card	Rs. 10,000 + Taxes	Unlimited airport lounge access for primary & add-on members
Axis Bank Reserve Credit Card	Rs. 50,000 + Taxes	2X reward points on international spends

Best Credit Cards for Rewards

Given below is the list of top credit cards for reward points that can help you save on your day-to-day spends:

Credit Card	Annual Fee	Key Feature
HDFC Regalia Gold Credit Card	Rs. 2,500 + Taxes	5X reward points on Nykaa, Myntra, Marks & Spencer, and Reliance Digital
American Express SmartEarn™ Credit Card	Rs. 495 + Taxes	10X Membership Rewards® Points on Zomato, Flipkart, Myntra, etc.
SBI Card PRIME	Rs. 2,999 + Taxes	5X reward points on dining, groceries, departmental stores, and movies
HDFC MoneyBack+ Credit Card	Rs. 500 + Taxes	10X CashPoints on Flipkart, Amazon, Swiggy, Reliance Smart SuperStore, & BigBasket
Axis Bank Rewards Credit Card	Rs. 1,000 + Taxes	10X reward points on spends at departmental stores & apparel

While the eligibility criteria may differ across issuers and cards, some general requirements are:

• Age: Minimum 18 years
• Credit Score: Preferably 700 and above
• Employment Type: Salaried or Self-employed

To process your credit card application, you need to submit the following proofs:

• Identity & Signature Proof
• Address Proof
• Age Proof
• Income proof

Some common documents are PAN card, Aadhaar card, employee identity card (in case of Government employees), bank statement, salary slips,  rent agreement, or utility bills. For self-employed applicants income proof requirements may vary. You need to submit ITR documents, Form 16, etc.

Note: Document requirements may vary.

RuPay Credit Cards on UPI

RuPay is a domestic card payment network and currently the only one offering credit card benefits on UPI transactions. In June 2022, RBI allowed the linking of RuPay credit cards to UPI apps, enabling quick payments while earning benefits on UPI spends. Initially, only a few credit cards were available on the RuPay network. However, most card issuers, including HDFC Bank, SBI Card, Axis Bank, ICICI Bank, and more, now offer RuPay variants of their existing cards or are launching new cards on the RuPay network. Additionally, while some cards—such as HDFC UPI RuPay Credit Card—are designed for UPI transactions and offer accelerated rewards on UPI spends, other RuPay credit cards offer a base reward rate or cashback on UPI payments.

Secured Credit Cards:  A Smart Way to Build Credit

Most credit card issuers prefer applicants with a good credit score (preferably above 750). While some issuers offer entry-level credit cards for new-to-credit individuals, getting approval can still be challenging. If you’re struggling to get a credit card and want to start your credit journey, you can consider applying for a secured credit card.

Secured credit cards are issued against collateral, such as a fixed deposit. These cards function just like regular credit cards but usually come with basic benefits. The credit limit is assigned as per the fixed deposit’s value. Even students and unemployed individuals can apply for secured credit cards, making them a great option for building credit.

You can use secured credit cards for both online and offline transactions, just like a regular credit card. By paying bills on time, they can help you build a strong credit profile. In case of any default payments, the outstanding amount is recovered from the fixed deposit.

How a Credit Card Can Help Improve Your Credit Score

Using a credit card responsibly can help you build and improve your credit score. Whether you're starting from scratch or looking to improve your existing score, here are some effective ways to strengthen your credit profile through credit cards:

When you use a credit card and pay your dues on time, it shows your ability to manage credit effectively. Late payments not only attract high interest charges but can also significantly damage your credit score. Since credit bureaus give maximum weightage to repayment history while calculating your credit score, making timely payments can have a positive impact on your score over time.

Another important factor is your credit utilization ratio (CUR)—the percentage of your available credit limit that you’re using. While having a higher CUR and paying the entire bill may not affect your score drastically, maintaining a high CUR for a longer period of time can harm your credit score. Keeping this ratio low shows issuers that you're not overly dependent on credit and can manage your finances well.

Instant Virtual Credit Cards in India

Virtual credit cards are digital versions of physical credit cards and work just like regular ones. With virtual cards, you can make online transactions and earn benefits such as rewards or cashback on your spends. A virtual credit card is issued electronically and all essential details—such as the card number, CVV, and validity—are accessible through your credit card issuer’s mobile app or website. While physical credit cards are usually delivered within 2–4 working days after approval, virtual credit cards are typically issued instantly. They often come with relaxed eligibility criteria, making them a convenient option, especially for new-to-credit consumers.

UPI-Enabled Credit Cards

With UPI-enabled credit cards, cardholders can now earn benefits on their UPI transactions as well. Currently, RuPay network is the only network in India that allows credit cards to be linked with UPI apps, enabling users to earn rewards or cashback on UPI-based payments. Some UPI-enabled credit cards offer accelerated benefits on UPI transactions while providing base rewards on other categories. Others offer similar benefits across all spends—whether through UPI or Point-of-Sale (PoS) terminals.

Add-On Credit Cards: Benefits & How to Apply

Add-on credit cards, also known as supplementary cards, are issued under the primary credit card account and can be used by the immediate family members of the primary cardholder, such as spouse, parents, children (usually above 18 years), or siblings. These cards share the same credit limit as the primary card and are ideal for sharing the credit limit & benefits with family members.

The benefits and features of the add-on card are usually similar to those of the primary credit card, and the number of add-on cards one can own varies from issuer to issuer. However, one thing to note is that all expenses incurred on the add-on credit cards are billed to the primary card account and must be paid by the primary cardholder.

Add-on cards come with their own set of benefits. For example, they can help the primary cardholder increase the overall credit limit, which in turn can help maintain a lower credit utilization ratio (CUR). Additionally, add-on cardholders can earn the same benefits—such as reward points, cashback, or miles—as the primary cardholder on their spends.

How to Apply for an Add-On Credit Card?

To apply for an add-on credit card, the primary cardholder can contact the card issuer and request an add-on card for a family member. The issuer will ask for personal details, including the relationship with the add-on cardholder. Once you’ve submitted the duly filled application form along with the required documents, the issuer will assess your eligibility and approve the add-on credit card if all criteria are met.