Until very late, debit cards had dominated India’s payment cards market. Conversely, credit cards were viewed with apprehension and were commonly believed to be affordable only by a select few.

However, in the last decade, the credit card sector in India experienced significant growth. As per a report, the credit card segment is further expected to achieve a CAGR of 25% between 2020 and 2025. It is in addition to the existing trends of growth in the segment observed. This transformation in the consumer mindset can be due to several factors, such as their increased ability to spend, more awareness regarding credit products, and tailor-made features offered by credit card companies, among others.

So, here’s a look at how an improved understanding of what is credit card and how it has changed the way individuals spend has resulted in its increasing popularity.

Easy purchase of big-ticket items on credit

In situations when individuals do not hold sufficient funds, they can use their credit cards to purchase items and then pay for the same at a later date. Thus, this payment tool eliminates the hassle of owning funds at all times, allowing you to make purchases towards the end of the month, and aids in streamlining the payment process.

Credit cards also come in handy while purchasing big-ticket items without straining one’s budget. Users can convert the due amount on their card to convenient monthly instalments, which enables them to repay the amount easily.

However, individuals should keep in mind that the utilised credit limit should be repaid at the earliest possible to avoid attracting interest. To do so, users must also explore various convenient options to pay their credit card bills apart from converting the amount to EMIs.

Customized reward programs

Credit cards enable individuals to earn attractive rewards on their purchases through various reward programs. Here, take a better look at what a credit card rewards program is and how it benefits cardholders.

Under such programs, cardholders can earn reward points on each transaction with their credit cards. These points can then be redeemed to avail discounts and vouchers on future purchases and save a substantial amount. There are also other types of rewards available for various credit card transactions such as cashback and discounts.

Nevertheless, users should remember that reward points can vary with card type and the card issuer. For instance, while one card may offer up to 3 reward points on each spending worth Rs.100, another card can offer the same amount for a transaction value of Rs.150-200. Additionally, some credit cards like the Bajaj Finserv RBL Bank SuperCard also offer reward points as welcome bonuses as well as on completing set spending milestones.

The issuer of the concerned card also provides pre-approved offers to accelerate and simplify the application procedure. Besides credit cards, such offers are also available on other financial products like business loans and personal loans. To check their pre-approved offer, individuals only need to enter details like their name and contact information.

Convenient and secure online transactions

Post digitization, online transactions have become a common activity. However, the increasing frequency of digital payments has also led to an increase in fraudulent activities such as identity theft, phishing, etc. Thus, while debit cards already facilitated online transactions, the increasing popularity of credit cards has only made such payments secure.

One of the reasons why credit cards are better than debit cards is that the former comes with security features that allow users to carry out online transactions safely. Some of the features offered on cards include covers such as zero-fraud liability, in-hand security, etc.

Readily accessible emergency financing at short notice

With a better understanding of what is a credit card and its expansive benefits, individuals can quickly meet their emergency funding needs with ease. Some credit card companies allow users to avail a short-term emergency personal loan against the unused limit on their card during a contingency.

Some card issuers also provide additional credit card uses such as interest-free cash withdrawal from ATMs. Here, users can withdraw money from the ATM in case of an emergency without paying interest on the same for around up to 50 days.

However, even though no interest is charged for the duration, users need to pay processing fees at a nominal rate.

Convenience for international transactions

Credit card users can also conduct international transactions with their credit card without much hassle as some of the cards are currency-neutral. However, in this case, a currency conversion fee will be levied on the amount transacted.

Apart from knowing what a credit card means and how it has changed the way of spending, one should also know the payment tool’s impact on one’s credit profile. As credit cards aid individuals in building up a positive credit history and improve their credit score, they must make sure to use these cards responsibly and pay the bills due in time for the best impact.


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