7 Reasons Why You Should have a Credit Card in India

By | January 10, 2016

visa_signature_credit_cardIn this digital age, if you are a frequent shopper there are so many reasons why you should own a credit card. I’ve recently met a friend to whom i was asking him to apply for a credit card. Interestingly, i came to know that he had made his mind not to apply for any credit card and fall in the so called “trap”. I figured out the reason being, many of his friends were paying interest on their credit card bills that had affected his decision to have one. I should make it clear that paying interest on your credit card bills should be the worst choice ever because they have the freaking high rate of interest, as high as whooping 30% which is higher than the personal loan (which is less than 18% usually). Lets dive into the benefits of owning a credit card and why you should.

Benefits of Credit Cards in India:

1. Strong Buyer Protection

Buyer Protection is the major reason why i prefer credit cards. There are millions of new websites coming up every month and we never know whom to trust and whom not to. When you have a credit card, you can make the purchase with no fear, because your purchase is protected against fraud. If the item you’ve ordered was not received from the seller, you can very well ask the credit card company to raise a dispute against the transaction. In credit card terms, its called “chargeback”. This is NOT available on debit card transactions.

I’ve had very good experience with disputes that i can be sure that all my purchases are super safe. At this point, i should say, almost 95% of the credit card holders in India never knew about this unbelievable benefit. This gives me confidence when i spend oh high value products.

2. 50 Days Interest Free Credit Period

Who would say No if you’re allowed to use someone else money for 50 days and payback later with no interest? Yes, with credit card, if you make a transaction today, you can pay the bill after 50 days grace period, provided today is the start of your billing cycle. This makes a huge difference if you’re making big purchases. While you wait for the time to pay bill, you can earn some interest on the money which you’ll be having on the savings account.

3. Cashback, Reward Points & Air Miles

Cashback and reward points are hugely hyped concepts used by banks to deceive you, making you to apply for the credit card. However, this is definitely a way to save a lot of money if you understand it right. Credit card companies provide you with certain Cashback and reward points based on your card benefits on almost every purchase you make.

Typically, you can save anywhere between 0.25% to 3.3% on all your expenses, which means, for every Rs.100 you spend, you can save upto Rs.3.30. This might sound pretty less, but think of large scale, if you’re spending 10 Lakhs on your card, you can save upto Rs.33,000. Worth saving, isnt it?

Not just that, you can earn airmiles and redeem for a free airtickets across the globe with chosen airline partners. That means, free vacation. Wont you need one?

4. Boost Your CIBIL Score


Increase CIBIL Score by making Credit card payments on time

Every bill payment you make on your credit card will be reported to credit information companies like CIBIL (Credit Information Bureau India Limited) which maintain and update credit scores of individuals from time to time. If you follow a good discipline in paying off the bills on time, you can expect your CIBIL score to go up gradually. This will help if you’re looking for a loan or a new unsecured credit card in the future. Getting approved for a loan will become easy. On other hand, this will become a nightmare if you’re not paying the bills on time, which will affect your credit score negatively.

5. Priority Airport Check-ins, Free Lounge Access  and other Perks

With premium credit cards, you can expect a lot of perks for holding the card. For example, you can have a priority check-in, no more long queues, you can avail airport lounges for free. These benefits varies from card to card. On some of the super premium credit cards you can even play golf at free of cost unlimited times a year. You will have 24/7 concierge service, a kind of personal assistant who can help you with almost all things in sourcing the information for you. it would be of great help if you’re traveling to an unknown place. Also there are lots of seasonal offers on websites, usually provided by Visa from time to time.

One of my favorite feature is complimentary Lounge Access. Ever wondered how to make the most out of that “Layover” time at airport? With premium lounge access, you can get spoiled with luxury environment to rest your mind, have complementary snacks, wine, a quick shower, etc. and this will infact give you feeling of traveling in business class, well, on top of it, its for FREE

6. Foreign Travels & Online Purchases


Credit cards for Foreign travel

No more wasting your money while converting your currency from INR to USD or whatever when you travel to other country. Your credit card can be used across the world and foreign currency markup fee which is usually 3.5% + Service Tax and is fairly lesser, as low as 2% on some of the selected premium credit cards. On top of it, you’ll get reward points or cashback on every purchase, making it the right choice to pay while you’re on foreign trip. Say no to Cash.

7. Credit Card Insurance Cover in India

Almost all premium credit cards issued these days comes with an attractive insurance cover on Air accident or unexpected accident cover abroad. It differs from card to card and you can usually see a very good amount insured for your life just for holding the right credit card (with no additional charges).

I hope that helps you to understand why you should own a credit card. However, its important that if you have a credit card, you must have the discipline of clearing the bills on time, else credit card is not for you. As someone said, Power brings responsibility. The greater the power in hand, the greater is the responsibility. Understand the power of the small plastic card rather getting carried away by this man-made illusion. I had never made a purchase if i cant pay the bill by month end. Feel free to drop your comments below 🙂

18 thoughts on “7 Reasons Why You Should have a Credit Card in India

  1. Vivek Talwar

    Is there any Credit Card Insurance Cover in India on HDFC Moneyback Credit Card?

    1. Siddharth Post author

      For Moneyback card, it doesn’t seem so, as they haven’t mentioned on website. You can still call up Customer care for details. It should be available for all premium cards.

  2. Hari Prasad

    Can you suggest me a best credit card with low interest?
    I just use for shopping, lifestyle, Online bus tickets.
    Please reply me ASAP.

    1. Siddharth Post author

      Carrying over balance at a certain interest is never suggested as credit card interest rates can vary between 20% to 40% (that’s huge). Rather, convert to EMI, HDFC has better offers at times, ICICI is equally good too.

  3. Hardy

    I am regularly using credit cards since ages now and have very good credit history and card limits. My bank also routinely upgrades my credit card to higher variants for free and with higher limits. Now, recently I have been repeatedly receiving offer to upgrade my HDFC Superia Credit Card to HDFC Regalia CC. But, they have a catch in the offer that my 60% of rewards points would be consumed in this upgrade and only 40% points would be carried forward to the new card.

    Though they claim that the monetary value of points in new card would still be higher due to the high point to rupees ratio in HDFC Regalia Card.

    Can you guide me is this worth the upgrade? Is there a catch by the bank reduce my hard earned reward points which are running into thousands? Should I go for the upgrade or continue as it is?

    PS – I don’t require even higher credit limit as I my limit presently is good enough for me and quite high compared to average card users.

    1. Siddharth Post author

      Well, the decision depends upon the number of points you have.
      Check the catalog redemption and see monetary value of your Superia points and compare it with Regalia ( 1 RP in regalia = 0.75 Ps).
      If it appears better, you can upgrade. Else redeem the points as much as possible and then upgrade.
      Tip: If you’ve too much points, consider upgrading to Moneyback card and redeem it as “cash” credit against statement.

  4. Surya Konduru

    Good article bro… learnt a lot about credit cards and it uses as I am new to it. What about the yearly fee on credit card if we have more than one credit card for different purposes? Because on just a basic credit card is costing Rs.500/- rupees for year.

    1. Siddharth Post author

      Most cards can be obtained for free if you use it often. You can negotiate for a waiver.

  5. Dushyant Singh Chouhan

    Thanks Siddharth, It is really a good blog, atleast for the newbies in credit card usage…

  6. K. Saravanakumar

    First Thanq siddharth….. I am still having doubt about credit cards…. What is APR?..
    Why there are so many categorical cards in a bank. Fuel, travel etc.,

    1. Siddharth Post author

      APR or annual percentage rate is the rate of interest per annum. APR term is usually used in western countries.
      Well that’s just to serve the needs of people with different type of spends.

  7. Majumdar

    I guess this is Off-topic, But I asked for a ICICI Sapphiro Card got a Platinum Chip Card instead.


    1. Siddharth Post author

      Maybe they have higher credit limit expectations for sapphiro.

  8. usha

    Hi, I have a HDFC Money Back credit card with limit of Rs 1.7 Lakhs. I am 50% owner in a private limited company from where I get Rs 1 Lakh transferred as monthly salary. I am looking for a credit card with emphasis on free airport lounge facilities outside India. Please suggest a good card. Is HDFC Diners Black card apt for this.
    Is lounge facility available for addon cards also and is there any limit to the number of visits in a year.

  9. jitendra saraogi

    regarding your point- 50 Days Interest Free Credit Period
    i have a query if we can pay credit card bill after due date but within 3 days grace period allowed,
    will there be any extra cost/penaly/interest if i pay after due date but within 3 days grace period.
    suppose due date in 2nd aug and i pay on 5th thru netbanking.
    please confirm.

    1. Siddharth Post author

      Depends on bank to bank. RBI says not to charge in such cases. So you can get reversal if charged.

  10. SS

    FREE Complimentary is a deception. There are hidden notes and charges which is not properly phrased or communicated by banks. I am having a bad experience based on that from one particular card – SBI Cards. I am owning SBI Cards Prime which entails an Annual charge and renewal fee. First year they provide a e-voucher for the Annual fee but then you pay for the taxes on it which is 20%. All these FREE offers and enticements are at best TRAPS!!!! Just realised that Priority PASS is for 4 International Lounge access and not for the Free 8 Domestic lounge access. And instead of mentioning about charges which runs into 27USD per person and tax of 18% on it, it is shoved as FREE of cost! SBI Cards has a stupid Customer care in GIT City Ahmedabad Gujarat with out knowing how to even speak proper English. So much for Premium!! If any SBI cards person approaches you in SBI bank or Malls, please stay away. I am closing the card as soon as the renewal period starts! I have already lost over Rs 10K on this stupid card. I trusted thinking of my account in SBI bu t they are a bunch of useless crap!!

    I already own Citibank , Standard chartered and ICICI bank credit cards and have had decent experience with these but as always, what looks good is not always best for you! You need to use loads of discretion and read between the lines on most cards and banks out to trap you!!

  11. ka

    Do cards in India offer price drop protection? In that case, you may add that as well.


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