How to get your first credit card in India, Different types of credit cards and why I recommend that you a credit card rather than a debit card.
If you are applying for a credit card for the first time in India, here is the only option through which you can get your first credit card easily without any cibil score history.
Open a fixed deposit with ICICI bank. You should have a savings account too. You should open the FD for INR 50,000 minimum for a period of 6 months at least. They will give you an option of 80% credit limit of the total money invested in FD on your credit card. They give three types of credit card options: one is an instant platinum card, next a coral credit card against fixed deposit and third a rubyx against fixed deposit. You can choose from one of these. You can get a higher limit depending on your FD amount.
After getting your first credit card from ICICI Bank, if you have a good cibil score of more than 800+ and have an income of 600,000 +, I would recommend that you get a credit card from American Express or Amazon ICICI credit card or a credit card from either Citi bank or Standard Chartered.
You must be wondering what is a cibil score?
It’s a score-based system ranging from 300 to 900 through which banks check if you pay your loans, credit card payments on time.
If you have a score of 765 and above it is considered good. Based on these you get a loan and credit cards. If your score is below 600, banks will think twice about giving you a loan or a credit card.
Don’t keep on applying for credit cards and loans continuously. It will reduce your credit score.
So faithfully pay your loans and EMIs on time to maintain a healthy score.
Different types of credit cards in India?
There are personal credit cards, Personal charge cards, Business credit cards and Business Charge cards.
Difference between these four:
Personal credit and charge cards are for individuals.
Business credit and charge cards are for business owners for their business.
Credit cards have a limit, while charge cards have no preset limit.
With Credit cards you can defer your payments for your usage over a period of few months. That isn’t the case for a charge card, you have to pay the entire money for any transactions within that month.
Best credit cards in India:
- Instant platinum card against your Fd from ICICI bank. It is easy to get and safe to use.
- Amex Rewards credit card, the first-year fees are INR 1000, if you spend more than INR 150000 per year next year fees are waived off. Otherwise its INR 4500 from 2nd year onwards.
- If you buy things online and from amazon, I would suggest you to get an amazon icici bank credit card. You can get cash back in your amazon account for every transaction you make.
- Any of the cards from Standard Chartered bank and Citibank are good. My cousin uses a Citibank Indian oil card, he gets cash back from Indian oil if he uses to fil up gas at Indian oil stations.
If your income is in the higher tax bracket below are the most premium cards in India.
- Amex platinum metal card: To get this card you need to have a personal income of INR 15 lakhs for a self-employed person, INR 25 lakhs for an employed person. This is a charge card, no preset limit on this card and you will have to pay fully at the month end you cannot have installments on this card. To get this card you need to pay a hefty fee of INR 60,000 per year. There are many perks that come with this card.
- Amex black card: First you need to have a platinum metal card from amex, then you need to spend 1-3 crores in a year for about 3 years and above all your income should be very high, then only will you be invited for this card. The card is priced at INR 200,000 per year. Similar features like the platinum card, no preset features and payment at the end of the month. There are many of features that come with this card, like your personal go to person who can help you out in many different things.
- ICICI Emerald card: This card is for people who have an income of 30 lakhs and above per annum. It’s one of the most privileged cards of ICICI bank. You would get a credit limit of 6-10 lakhs per month on this card.
Business credit cards:
I would recommend you to have a bank account with either icici or hdfc and get a business credit card from one of them. Though I don’t prefer hdfc credit card nor their insurance department, I don’t mind their personal banking services as I am one of their classic account holders for their savings and current accounts.
My mom has got an add on business card for me from her furniture business from icici bank. I did get a lesser limit when compared to my mom’s business card.
American express also gives out credit cards for business owners. Since I am been using my amex personal card for business purposes too, they offered me a credit card for my business. But they said my business needs to make more than 3 crores inr (Around 500,000 usd) per year. That time I had just started my gaming studio so I didn’t fit the bill, then they said that if the bank where I have my business account gives me a guaranty of 500,000 inr they would give me a business credit card immediately.
How many credit cards one should have?
I would recommend a person not have more than 6 credit cards if the person is self-employed, if employed not more than 5.
Out of these 5-6, two should be from American express, one a credit card the other a charge card. One from amazon-icici bank if you buy constantly from amazon, one a business credit card either from icici bank and hdfc bank or American express. one credit card from your Fd from icici or money back credit card from hdfc bank and finally a credit card from either standard chartered or Citibank.
I would recommend you to have 5 or 6 because, say suppose you are buying a tv worth 200,000 inr and if one of your cards has a 200,000 limit or 220,000 limit. Immediately your cibil score gets affected as you are maximizing your credit card. Spread out your purchase on your cards. As more than 80% purchase from one single card affects your score.
why I recommend that you use a credit card more than a debit card or cash
Firstly, it is a lot safer for a person like me who constantly buys products on amazon or pays for stuff online like paying monthly software payments. For example, once with my hdfc money back credit card, 3-8 times in one single day money was taken from my credit card and that too from Ireland. That time I haven’t been to Europe nor did I purchase anything from abroad. Luckily whoever did this couldn’t do it a greater number of times as they had maxed my credit card limit. I had to call up my credit card- bank customer care and inform them about this and they blocked my card and refunded the entire amount and also gave a fresh credit card.
2nd reason why I prefer using a credit card more than a debit card or cash is for the rewards feature. If I use my credit cards at a certain store, I would get more discount percentage and each time I use them I also get points which can be redeemed instead of paying back the charges.