One of the vital objectives which the Indian economy is striving to accomplish is that of going cashless. Credit cards are among the financial instruments that will aid in realizing this goal.

 Before applying for a credit card in India, one must get enlightened regarding its benefits and drawbacks. Some of the best credit cards in India extend innumerable perks in the form of discounts, redeemable reward points, waiver on fuel surcharges, and complimentary lounge access among others; not to forget that the primary feature of a credit card is permitting deferred payment.

 There are multiple kinds of credit cards specializing in varied domains — the best rewards credit cards in India shower its holders with high-end rewards (particularly in the form of redeemable points) on every single transaction; the best fuel credit cards waive off the fuel tax, which is nothing less than gold in the times of sky-rocketing fuel prices. 

Secured credit cards can be availed by those possessing a non-existent or substandard credit history, and the list goes on. Besides the umpteen advantages associated with credit cards, several inconveniences are partnering with these tools of plastic money. 

These shortcomings act as a deterrent to the resolve of procuring or owning a credit card. So, it is important that you enhance your knowledge regarding the various pros and cons of using a credit card in India.

Benefits of credit cards’ usage in India

Besides the obvious advantage which credit cards offer i.e., providing the scope to delay the payment, there are other gains that one can savour by possessing a credit card.

  • Augmentation of credit score: Wishing to secure a loan in future? If the answer is in the affirmative, then improve your creditworthiness or bolster your credit score. One way of strengthening the credit score is by paying the credit card’s bill on time. Credit information companies like CIBIL, Equifax etc. keep a tab on the expenditures and repayment habits and update the credit score accordingly. So, credit cards can also ensure approval of loans in future.
  • Provision of EMI: Equated monthly instalments is a facility tailor-made for the masses as purchasing expensive goods have been rendered affordable. You can put your credit card to use to convert humongous bills into EMIs. For instance, the Bajaj Finserv RBL Bank SuperCard, one of the best credit cards in India, permits any bill ranging above 3000 INR to be converted to EMI.
  • Wide range of rewards: The best rewards credit cards in India grant rewards in the guise of points on every single purchase. For instance, the HSBC Smart Value Credit Card provides 3 times the normal reward points on online shopping, telecom and dining expenditures. The rewards also come in the form of enthralling discounts, cash backs etc., certainly a sort of paradise for those believing in saving every penny.
  • Sheltering against misuse and provision of multifarious insurances: The credit card companies protect cardholders against theft or misuse by transferring the liability to themselves. Moreover, with a little more investment, one can buy travel insurance that safeguards against misplaced luggage, accidents, cancelled trips etc.

Drawbacks of credit cards in India

  • Implicit costs: Several hidden costs accompany credit cards, such as delayed payment fees, joining and annual fees. Any delay in making any payment results in a fine that takes a toll on the credit score.
  • Not inclusive: Credit cards are not inclusive in the sense that not everyone can afford them; the costs associated with them are not only inflated but also numerous. A vital criterion for owning a credit card is a noteworthy credit score. Secured credit cards do not require a decent credit score or history but they are issued against a fixed deposit that cannot be feasible for many.
  • Fear of being duped: In the absence of stringent cybersecurity laws, credit card fraud has become rampant. Lack of awareness campaigns leaves the ground open for scammers to dupe gullible people. Moreover, advancement in technology has made cloning of the credit card possible. Any sort of recklessness or carelessness on part of the person while reading the credit card statement can prove to be costly. Banks usually cover for a proved suspicious activity or fraud. Hence, it is recommended to be highly vigilant while dealing with credit cards.

Like every other object, credit cards have their pros and cons. The benefits of credit cards are too fascinating to be ignored. Who would waste the opportunity to save every rupee and earn various rewards? Or who would not desire to purchase expensive goods and not worry about  paying the entire amount in one go?  Some of the drawbacks like the implicit costs and credit card frauds can be averted by being financially aware and prudent.

So, before filing an application for a credit card, analyse both the gains and drawbacks associated with it. If you’re scouting for the best credit card in India, Bajaj Finserv RBL Bank SuperCard is the answer. This credit card allows availing of loans, withdrawing cash from ATMs, and converting bills into EMIs among others.