Credit Card is also known as plastic credit. It is issued by a bank or a similar financial institution that gives authority to the borrower to borrow funds at the point of sale. Credit Cards are a convenient substitute for cash and primarily used for short-term financing. A Credit Card is issued based on eligibility factors that include monthly income, credit history, credit score, company category and other related factors. The lending financial institution draws a credit limit for each borrower based on his/ her credit profile. Usually, the borrower must pay back the credit within 45 days of the purchase. In case, the cardholder delays or fails to pay back the amount, the bank charges interest on the borrowed amount.
Eligibility Criteria for a Credit Card
There are certain factors that are important before applying for a Credit Card. Refer to the following table to know the eligibility for Credit Cards:
|Eligibility Criteria||Salaried Employees||Self-Employed|
|Age||21 years and above|
|Monthly Income/ ITR||Minimum 20,000 p.m., however, income criteria varies from bank to bank|
|Credit Score/ Credit History|| |
Features and Benefits of Credit Card
There are several benefits of a Credit Card. The following benefits are:
- Substitute of Cash: Credit Cards are a substitute for cash. You can use your Credit Card to make purchases in person and online.
- Joining Fee: Depending on the Credit Card some financial institutions may charge a joining fee.
- Repayment of Credit: The borrower must repay the amount to the bank for the purchases made within a stipulated time (usually 30-50 days). If the borrower cannot repay the card balance, the bank will charge interest on the unpaid balance.
- Convenience: Credit Cards provide convenience to the borrowers as they can make purchases easily anywhere and anytime. Moreover, the payment can be made in domestic as well as in foreign currency.
- Additional Benefits: Apart from the convenience, Credit Cards are beneficial in other ways. Credit Card users can earn reward points, enjoy discounts and cashbacks on purchases.
- Helps in Building Credit History: Credit Card details and repayment history can help the borrower build a strong credit rating. The sound repayment track of credit card bills impacts the credit score of the borrower.
- Helpful in Emergencies: A Credit Card could be helpful in an emergency. For example, an urgent requirement of cash for a medical emergency can be fulfilled by a Credit Card.
- Security: One of the great features of a Credit Card is the chip and pin system that secures the transactions from any kind of theft.
- Amount of Penalty: In case the user delays or fails to pay back the amount then the bank charges a percentage of the bill due as a penalty. Typically, the penalty ranges from 36% to 42%.
How is a Credit Card Used?
Whenever a purchase is made with a Credit Card, the users have to swipe their card at the point of sale. The system authenticates the identity of the user with the associated vendors and generates the receipt for both buyer and the seller. After the purchases for the current month is made, the bank sends a monthly bill that is required to be paid before the due date. In case the user fails to pay the bill before the due date the bank charges a penalty for the same in the form of interest that varies from bank to bank.
A credit card is also used for online transactions. The user has to fill in the card details including the card number and CVV code for authentication. The payment is made once the authentication is done.
What's the Right Credit Card for Me?
Credit cards are issued by several banks and other lending institutions packed with different benefits. However, the users have to select the card that is suitable to their needs. Banks are offering credit cards based on the usage of the customers. The borrower can consider the following points to decide the most suitable card:
- Reward Card: Reward Card enables the user to earn redeemable reward points. The user can earn points on every purchase and enjoy various offers.
- Indian Oil Card: This card is ideal for users who have a high spend on petrol. Cardholders have the flexibility of paying for petrol with reward points.
- Shopping Card: This card type is specifically designed for the users who enjoy shopping. By using this type of credit card they can get various shopping related discounts and offers.
- Cashback Credit Card: This type of card gives Cardholders some part of their purchase back in the form of "cashback".
- Airlines Credit Card: There are users who travel via flights. With the help of this card, users can get cashback, discounts and redeemable mileage points on certain airlines.
After meeting the eligibility criteria, the user can pick the credit card based on their usability.
How mymoneymantra Can Help the User in Getting the Best Credit Card?
mymoneymantra is a leading financial services marketplace with an experience of more than three decades. The mymoneymantra team consists of experienced and service-oriented professionals who help you choose the best Credit Card, suitable to meet your specific requirement. They will analyze your financial needs, and then help you throughout the process beginning from the submission of Credit Card application till the card issuance and even afterwards for any service requirement.
Contact our loan experts anytime and obtain the best loan offers.
|Name of the Credit Card||First Year Fee||Rewards|
|Jet Airways American Express Platinum Credit Card||5,000 + Applicable Taxes||Get 5,000 Bonus JPMiles + complimentary Base Fare Waiver for Jet Airways Domestic Ticket (on every renewal)|
|American Express Membership Rewards Credit Card||1,000 + Applicable Taxes||Get amazing rewards with new 18 Carat & 24 Carat Gold Collection|
|American Express Gold Card||1,000 + Applicable Taxes||Enjoy flexible spending benefit with 'no pre-set limit', and adjust your spending automatically as per your financials, spending pattern, account history, and credit record|
|American Express Platinum Travel Credit Card||3,500 + Applicable Taxes||Spend 4 Lakhs/Yr & get additional Travel Vouchers of up to 11,800 + a Voucher from the Taj Group worth 10,000|
|SBI SimplySAVE Visa & Master Card||499||Get 10 reward points on every 100 spent on Movies, Dining, Departmental Stores, & Grocery Spends|
|SBI SimplyCLICK Visa & Master Card||499||Get 10X Reward Points on online spends through exclusive partners|
|SBI ELITE Visa & Master Card||4,999||Enjoy free movie tickets of 6,000/year|
|IRCTC SBI Platinum Credit Card||500||Get up to 10% cashback as reward points for railway ticket purchases through IRCTC|
|SBI Prime Credit Card||2,999||Get up to 10% cashback as reward points for railway ticket purchases through IRCTC|
|Standard Chartered Manhattan Platinum Credit Card||999||Enjoy attractive discounts & offers across travel, shopping, dining, etc. with the Standard Chartered Good Life programme|
|Standard Chartered Super Value Titanium Credit Card||750||Enjoy 5X rewards for spends at overseas point-of-sales + complimentary Priority Pass for access to over 1,000 airport lounges across the world with 1 free usage every month|
|Standard Chartered Platinum Rewards Credit Card||250||Earn up to 9X rewards for spending every 200 on Lifestyle, Max, Home Centre and other Landmark stores|
|Standard Chartered Emirates World Credit Card||3,000||Earn 6 Skyward miles on spending every 150 on Emirates and 3 Skyward miles on each 150 spent on every other transaction|
|IndianOil Citi Platinum Credit Card||1,000||Get up to 71 ltr of fuel on IOC outlets for free every year|
|Citi Rewards Credit Card||1,000||Earn 10 reward points for spending every 125 at apparel & department stores|
|Citi PremierMiles Credit Card||3,000||Get 10 Miles for spending every 100 on all airline transactions|
|Citi Cash Back Credit Card||500||Get 5% Cashback on all utility bill payments through Citibank Online Bill Pay|