Save ₹50k annually with the right credit card
- India has 10 Cr.+ active credit cards, but only 3% of Indians own one. This means– 97% are missing out on credit card benefits. But things are changing. Credit card adoption in India is rising as people recognise the advantages of credit cards, like building a credit history and managing expenses.
India contributes to over 46% of the world's digital transactions. In FY 2023-24, 1.6 crore new cards were issued. And this number is projected to rise, as you can see in the above image.
However, 97% of Indians don't hold a credit card. And these people are missing out because owning a credit card can help save thousands of 7% of monthly expenses. Look at it this way: if you use your credit card right, you can save more than ₹50,000 a year! This is reason enough to get a credit card.
But not before careful thought and consideration. There are a total of 31 card issuers in India, offering a range of options. SBI alone has 72 different credit cards in its portfolio. Hence, choosing the card that fits you best can be quite difficult. But worry not! At Finology Select, you'll find 90+ top credit cards. These cards are reviewed and analysed in detail by experts, including their features, benefits, comparisons, and everything else you need to make the right choice.
What are Credit Cards?
Before you get one, you need to know what a credit card actually is. It's a financial tool that allows you to borrow money to make purchases. This plastic or metal card lets you buy things now and pay for them later, usually within a month. And that's not all it does! You can even earn 5% cash back on purchases, saving you money over time. With the convenience of cashless transactions, having a credit card can make your life easier and more rewarding!
7 Reasons Why You Should Get a Credit Card
Owning a credit card can offer many advantages, making it a valuable financial tool. Here are 7 reasons why you should get one, too!
- Building Credit History: Using a credit card responsibly and making timely payments can help you establish a credit score ranging from 300 to 900.
- Emergency Financial Support:It enables you to access funds quickly during urgent situations. It can also help you feel more financially secure by giving you the ability to cover unexpected costs.
- Rewards and Cashback: They allow you to save while spending with options like 5% cashback on online spending and 1% on all other purchases.
- Convenience and Security: 75% of online transactions are executed through credit cards, thanks to their fraud protection features, which limit liability for unauthorised charges.
- Flexible Payment Options: With features like BNPL, you can enjoy interest-free periods of up to 90 days and flexible repayment plans.
- Discounts and Special Offers: With credit cards, you get rewarded for spending money. For example, the Amazon Pay ICICI Bank Credit Card offers:
- 5% cashback on Amazon purchases for Prime members
- 3% cashback for non-members
- 2% cashback at over 100 partner merchants
7. Travel Benefits:A travel credit card makes your travel experience rich. For instance, the Air India SBI Signature Credit Card offers reward points worth ₹20K in air miles on joining.
Cash can buy these benefits, but credit cards offer them as rewards for spending. So, you see how having a credit card can be a smart choice.
How to Find the Right Type of Credit Card
Finding the right credit card is not as difficult as it may seem. Here are 4 steps you can take to find one that suits you best:
Step 1: Check Your Credit Score
A score above 700 is generally considered good. Your credit card application is likely to be approved if your CIBIL score is 750 or over.
Step 2: Identify Which Type of Card You Need
Credit cards offer a variety of benefits, including:
- Travel
- Fuel
- Rewards
- Cashback
- Dining
- Insurance
- Interest
And once you realise what kind of privilege you'd like to enjoy, Select's Genie will find the best cards for you within seconds. Then you can choose from:
- Cashback Credit Cards: Earn on everyday purchases, with rates typically ranging from 1% to 5%.
- Rewards Credit Cards: Collect points redeemable as gifts or travel benefits; ideal for those who pay off balances regularly.
- Travel Cards: Ideal for frequent travellers, offering perks like airline miles and lounge access.
With just a few clicks, Genie not only simplifies your search but also helps you make smart decisions that align perfectly with your lifestyle and spending habits!
Step 3: Narrow Your Choices by Asking the Right Questions
Not all cards are the same, and almost none of them are free. So before you choose a credit card, find out:
- What are the annual fees?
- What rewards or benefits align with your spending habits?
- Are there introductory or welcome offers?
Step 4: Apply for the Cards That Offers You the Highest Value
After following steps 1-3, apply for cards offering maximum rewards. For example, the HDFC Diners Club Black provides 5 reward points per ₹150 spent, while the ICICI Amazon Pay card offers a 5% return on Amazon purchases.
But which one offers more value? Well, you can compare them and 90+ other cards on Finology Select and choose the one that is best suited to you.
How You Can Save ₹50k Using a Credit Card?
If you use a credit card strategically, you can save thousands per year. Don't believe it? Here's an example:
Aditya is a Senior Software Developer working in Bangalore. He holds 2 credit cards: HDFC Millennia and SBI Cashback. He earns ₹20 lakh per annum, and here's what his monthly expenditure looks like:
This means that Aditya earned an effective cashback of over ₹50,000 in a year!
By using your credit card carefully, you can save thousands every month. However, it is important to remember that these benefits come at a cost. That's why, before you make a choice, you should do some research. With Finology Select, you can find all the information you need to make a smart choice!
Conclusion
Credit cards have become effective financial management instruments. The growing credit card transaction values (from ₹9.7 lakh crore in FY21-22 to ₹18.3 lakh crore in FY23-24) prove their increasing importance. Beyond their convenience, credit cards offer attractive rewards and opportunities to save money.
However, it can be difficult to pick the best credit card for you. There are multiple factors to consider before you make a decision, mainly if the cost of the card outweighs the benefits. In this case, having a platform to find unbiased credit card information can help make your choice easier.
Picking a credit card, whether it is your first or one that fits you best, can be overwhelming. However, it doesn't have to be stressful. With the right guide, like Finology Select, it is easy peasy.
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
- Top Gainers
- Top Losers
- 52 Week High