Credit cards are issued by financial organisations and are used to borrow money and pay for products and services. The credit card holder must repay the borrowed funds as well as any additional fees (if any). 
Obtaining your first credit card is a significant milestone and adjustment. Although you may already understand how credit cards work and how to use them responsibly, the devil is always in the details—learning the ins and outs before you start will save you money and speed up the process of developing excellent credit. 

You may also want to know : How credit score can affect your financial portfolio.

Here are 13 Facts About Credit Cards in India You Should Know- 

Your Earnings 

When applying for a credit card, many details are required, including age, residence, monthly in-hand income, and work type. 

But, of all the questions asked, the information about your income is the most crucial since it determines your monthly payback ability. 

A higher income shows that you can pay your payments on time and regularly. Thus, someone earning Rs.60,000 per month is more likely to be approved for a credit card than someone earning Rs.25,000 per month. 

The income you generate is also necessary for the bank to calculate your credit limit at the time of credit card issuing. 

Your credit score 

If you apply for a credit card, your credit history is quite important. Before you receive a credit card, Credit Information Bureau (India) Limited (CIBIL) records are verified to learn about your credit history (generally for a second credit card). This report also shows if you have taken out any loans, such as an education loan, a personal loan, a vehicle loan, or a house loan. 

It examines the payment status of the loan you took out and whether the payments are on time or late. The CIBIL report also includes the most recent credit score. 

Credit Card Types 

You should be aware of the numerous types of credit cards accessible in India. If you are new to using credit cards, for example, you can select a credit card with a low annual fee. You may also choose a credit card based on your requirements and desires, such as a gasoline credit card, a travel credit card, a shopping credit card, and so on. 

Your Earnings 

Credit card companies will question about your income in order to assess your repayment capacity. Your salary is critical when applying for a credit card. It demonstrates to the credit card company’s issuer that you can pay your bills on time. The card possibilities increase in proportion to your income group. 

Interest Rates on Credit Cards 

You must be aware of and comprehend the credit card interest rates. Ideally, you will select a credit card with the lowest interest rate, the lowest charge, and the most benefit. 

However, acquiring a credit card with all of the aforementioned perks is difficult. Choose a credit card based on your preferences and priorities. Nobody likes to pay excessive credit card interest, so be cautious! 

Begin with a low credit limit. 

To decrease the danger, card companies will first offer you a modest credit limit. The card companies will then give you the option of increasing your credit limit if you establish good credit card management habits. Furthermore, your credit limit is determined by your income. As a result, if you make a modest salary, your credit limit will be smaller. 

Terms and Conditions for Credit Cards 

When you use the card, you are agreeing to the terms and conditions. As a result, it is critical to be fully aware of them. First, learn about the card’s APR range, any fees, the rewards card, and any other important information. Then, devote adequate time to scrutinising the terms and conditions in minute detail. 

Interest: What Does It Mean? 

If you pay off your credit card balance in whole and on time, you will be using the bank’s money for free since you will not be charged interest. If you carry a debt from one month to the next, you will be charged interest on the balance based on your card’s APR (Annual Percentage Rate). The APR typically runs from 30 to 40%. 

The Grace Period 

A grace period is when the issuer does not charge interest on transactions if the new balance is paid off before the payment due date. The grace period runs from the conclusion of the billing cycle to the following payment due date.If you fail to clear your obligation in full by the deadline and lose the grace period, you will be charged interest on the outstanding sum. 

Credit Card Fees & Charges Take Caution! 

Late payment, renewal, processing, over-limit fees, cash advance fees, international transaction costs, and membership fees are all examples of hidden charges on credit cards. As a result, it is critical to be aware of these costs ahead of time. 

Because the bank amount remains the same after using a credit card, it may be tempting to continue using it. However, the user should keep high-interest rates in mind because they may apply once the interest-free term expires. 

Penalty for Late Payment 

You should be aware of the penalties that may apply if you pay your debt beyond the due date. Furthermore, if you pay late, you will incur extra fees. Late payments may also be reported to credit bureaus, harming your credit history and lowering your credit score. 

Maintaining a healthy credit utilisation ratio 

Regardless of your credit limit, it is critical to maintain track of your expenditures. Even if you have an excellent payback history, a greater utilisation percentage is not beneficial since it impacts your overall credit health. 

EMI Facility 

If you want to make a large purchase but don’t want to deplete your resources, a credit card might help with postponed payments. If you like, you may also make equal monthly payments. 

It benefits you because you are not paying a big amount for your purchase. It is usually preferable to pay via EMI rather than taking out a personal loan to make that large buy. 


On the one hand, getting your first credit card is a huge accomplishment, but it’s also not simple. It is essential to properly understand how a credit card works in practise and to carefully research all of the terms and conditions that apply to it. 

Knowing the chances and possibilities before selecting one might help you save money and enhance your credit score. 

Good luck with your investments! 

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