Credit cards allow us to make desired purchases and expenditures without worrying about any liquidity issues. These can help us to maximise the value of the purchases we make by offering benefits like cash back, reward points, special discounts, etc. Most cards offer these at no extra cost as long as the total outstanding dues on the card are cleared in full and on time in every billing cycle.

While many of us use this payment tool often, there are chances that we do not know some of the important and finer aspects of credit cards. Here is a walkthrough of some of these points that can help users in making informed decisions.

  1. Credit card against an FD

Banks and credit card issuers generally do not offer credit cards to all applicants as they require applicants to meet specific eligibility requirements around minimum income, credit score, occupation, etc. Applicants who don’t meet all the eligibility criteria can approach the bank to request a secured credit card against fixed deposits. Banks may grant credit cards with credit limits of up to 90% of the FD value subject to certain terms and conditions. However, if one defaults on the credit card dues, the bank reserves the right to recover the dues by liquidating the FD set aside as collateral.

  1. Pre-approved loan on credit card

Many banks extend pre-approved loans on select credit cards to their customers. These unsecured loans carry interest rates ranging from 12% to 30% p.a. The EMIs on these loans are added to the total credit card dues and are also linked to the card’s credit limit. Since these are pre-approved loans, they are disbursed quickly and may allow easy borrowing for customers who are facing a financial emergency. Banks that issue such loans often advise customers to read the loan fine-print and assess their affordability to ensure that the credit limit is sufficient to accommodate other card expenses. 

Additional Reading : All That You Need To Know About Personal Loans On Credit Card

  1. Zero annual fee credit cards

While applying for a new credit card, many people tend to prefer cards with zero annual fees. However, most often these zero annual fee credit cards are often the basic variants that provide very few benefits. On the other hand, cards that have annual fees often provide premium perks and privileges including complimentary travel insurance, rewards programs, additional discounts at hotels and restaurants and even e-commerce websites, etc. If used smartly, the value of the rewards on such cards can be much higher than the charges.

  1. Expenses converted into EMIs

Big-ticket purchases like appliances, furniture, gadgets, etc from select outlets bought using credit cards can be converted to EMIs during the purchase. Many cards also provide the facility of converting the eligible expenses into EMIs so that they can be more affordable. 

While this is a helpful feature, users must get complete clarity about the applicable charges before availing of the EMI provision. It is important to ensure that all previous dues are cleared in full and on time so that additional penalties are not applicable. Make sure that your total expenses on the card including the EMIs remain under 30% of the overall card limit to minimise adverse impact on your credit score.

  1. Credit limit

Banks determine the applicable credit limit for every credit card account depending on a user’s creditworthiness and income. Thus, if a user believes that his/her card credit limit is low, they can reach out to the bank and request them to increase the same. However, it is always a bank’s prerogative to decide on amending it or leaving it as it is. A high credit limit doesn’t necessarily mean that a user can spend carelessly. Users must use credit cards responsibly to clear dues on time and ensure a good credit score at all times.

Additional Reading: Smart Ways to Get Higher Credit Limit on your Credit Card


Credit cards are very useful if used correctly. Those who are looking to apply for a credit card must evaluate the available choices based on the finer details mentioned above. By comparing the cards that one is eligible for, users can easily measure card features against individual requirements. 

Always treat credit cards as a double-edged sword that can be a powerful tool but if not used correctly, these can easily inflict damage before one knows it.


  1. How do I choose a credit card in India?

To choose the right credit card in India, applicants must check certain aspects like eligibility, features, benefits, reward points, privileges, etc. It is also important to go through the fee details along with other applicable terms and conditions.

  1. What kind of card does India use?

Merchant-accepted cards are popular in India. Users also prefer cards that have ATM acceptance. 

  1. What should I know before getting a credit card?

Users must know the terms and conditions of a credit card before getting one. There are often hidden charges that users must know beforehand.

  1. Is getting a credit card a good idea in India?

Yes, credit cards offer a great amount of comfort for various needs such as online purchases, merchant access, lounge and hotel access, etc. These are also helpful in gaining a good credit score.

  1. What is the fastest way to build credit?

The fastest way to build credit is by using credit cards and other forms of credit while ensuring that the repayment is done promptly.