JAGOINVESTOR

CRED App Review – Earn rewards on paying credit card bill

Posted on October 14, 2019August 18, 2021 by Jagoinvestor

Today I want to do the review of the CRED app. I have been using it for the last 12 months already.

CRED is an app, which gives you rewards on timely payments of your credit card payment. If you are not using this app, you may be making credit card payments anyways by other online methods. All you have to do is to make payments using the CRED app, that’s all.

It’s that simple to use!

There are various brand offers and coupons from categories like dining out, food delivery apps, flight tickets, and even shopping? Here is one instance.

We get different kinds of rewards for using or raising the credit card bill amount. Like, in my case, I have a PVR credit card of Kotak bank, for every Rs. 15,000 credit card bill, I get points to redeem against 2 PVR tickets (max. Rs. 400 for 1 ticket). Because of this, I get influenced to pay my bills mostly by credit card to reach Rs.15,000 of a bill every month.

Here is how an offer looks like

This is how banks influence us to use a credit cards. But, when we pay bills of credit cards we never get any discount or reward on that amount?

However, now it is possible with the help of the CRED app. This app gives you rewards for paying your credit card dues via this app.

What is CRED App?

CRED is an app on which you add your multiple credit cards and make payments by the app itself, which gets credited to your bank in few hours. The app is exclusively for those people who have a good credit score (checked automatically from Experian or CRIF) and have some history of credit card payment. This is checked when you register for the app for the first time.

It is also equipped with the cred to protect feature which is an AI (Artificial Intelligence) backed system, that keeps track of every single nuance of a credit card payment journey – right from due date reminders, spending patterns and other card usage statistics.

There are two things you can earn on CRED App

Coins – You will earn coins equivalent to your credit card bill amount every time you pay the credit card bill. So if you pay the credit card bill of Rs 40,000, you will get 40,000 coins. The coins will keep accumulating month after month. So you can keep collecting coins and later redeem it in any manner. There are some offers and benefits which requires a very large amount of coins, so it’s beneficial to collect lots of coins. I currently have around 3,50,000+ coins in my own account.

Gems – You can also earn “gems” in the CRED app. These are different kinds of currency that are required by some offers. Right now one earns 10 gems on each referral. So if your referral signs up on the CRED app, then you will earn 10 gems. If you like Jagoinvestor, please help us earn some coins by registering on the CRED app using this link.

Here is a sample of some of the offers on the CRED app

iXigo flight bookings – Rs. 1000 off on using 5,000 coins
Flo Mattress – Rs. 5,000 off on using 20,000 coins
Swiggy – Free delivery for 3 months on using 5000 coins
UrbanClap – Flat 50% off on man grooming using 25000 coins
Flea Bazaar cafe – Flat 20% off on total bill using 5000 coins
Cashback – Get Rs 1,000 cashback for 30 gems
Flipkart – Rs 500 gift card for 20 gems

There are various kinds of coupons and offers available under the CRED app under different categories. Depending on what offer you want, you can go into that category and explore the offers available in your city.

3 steps to register for CRED App

You can avail of the benefits of this app only if you meet the eligibility criteria defined by the app. Which is – to have a good credit score. Following is the step-by-step process for this –

Step 1 – Download the Cred App from here

Step 2 – Register to cred using your phone number

Login to cred using your name and phone number registered with a credit card.
The app will prompt you to grant permission for phone access to verify the number and SMS (which is needed to send a reminder on your due credit card bills), just grant the permissions.
Cred will process this data and check your eligibility, on the basis of your credit history. Cred has a tie-up with credit bureaus like Experian and CRIF.
If your credit score meets the standards of cred then you will receive an OTP to proceed further

If your membership is rejected, improve your credit score and apply after a few months again. It may also happen that you are using multiple mobile numbers for banking, so try again using another number. So, if you have just got your credit card some weeks back, please wait for a couple of months before you apply.

Step 3 – Add your credit cards

Once registration is successful on the CRED app home page all your Credit Cards would be displayed. You just need to verify these cards by entering the last 4 digits of the card. To ensure the active status of these cards, cred will instantly deposit Rs. 1 to each of the cards.

You will not be asked to enter an expiry date or CVV of your cards which ensures the safety of this app.

Once successfully getting your card verified, you can exclusively earn rewards and scratch cards on every bill payment. Master card, American Express, Diners Club, and VISA cards are presently being handled by the CRED app.

5 benefits you get in the CRED app

Coming to the main point of getting rewards and benefits from the CRED app, below are the following things

Cashbacks on paying bills
Discounts
Free gifts and offers
Spending Analysis
Credit Score tracking

Let’s look at each of them

Benefit #1 – Cashback on paying bills

You may earn cash back (all called #killthebill) on every transaction. At the time of payment of more than Rs. 1000, you may be notified that you have won a scratch card and you might earn some amount which will be credited back to your credit card.

rewards earned on cred

Benefit #2 – Discount Offers

Now, this is the major part of the benefits. CRED app has associated with various brands and it offers you some discount (cash discount or percentage discount) when spending a particular amount.

For example one of the offers is a “20% discount on the next 20 orders from BOX8”, so you can see that you will get 20% on the Box8 for a long time, but you still have to pay the rest amount. So even if you are getting a discount, you need to SPEND on it. So these discount offers are truly good only when you are anyways going to spend money on these brands.

Sometimes, it may happen that these offers also give you a chance to experience things which you might not have done without a discount, so technically it’s beneficial in that manner, but still, spending has to be done.

Benefit #3 – Free Gifts and benefits

There are some rewards that are truly free for you by burning some coins or gems. You don’t have to pay anything to get the benefits. These I personally think are the real benefits in a way, because you are not spending anything out of pocket, but just availing an offer.

Below you can see an example, where you can burn 2,00,000 coins and get a pass for 2 people Bacardi NH7 weekender event and even lounge access. Apart from that, I have shown 3 more offers for complimentary benefits without paying any extra from your own pocket.

So you can keep collecting the coins and wait for the right offer or reward to arrive which is useful for you.

Benefit #4 – Spending Analysis

One small benefit of the CRED app is that you get some insights into your spending pattern and the history of your credit card payments in one single place. This is good for those who have multiple credit cards and want some visibility on how their spending is happening.

Benefit #5 – Credit Score Tracking

CRED app will keep showing your credit score from time to time, so this will help you to stay motivated to make timely credit card payments and you can also keep a track of how your credit score is moving over time. Right now CRED has done a tie-up with Experian and CRIF and pulls your credit score from both places.

How to make payment in the Cred app?

Paying credit card bills via the CRED app is very easy, just click on pay now, enter the amount and click proceed. Nowadays the bill amount along with the minimum due amount automatically gets pre-populated. You can make payment via debit card/net banking (NEFT/IMPS) or UPI. It may take some time to reflect on the money credited to your credit card account.

On Completion of Bill Payment of your Credit Card, you will be rewarded with CRED Coins and Kill Bill Scratch Card which you will have to redeem.

Is the CRED app safe?

I am sure that you must be having this question about the safety of this app because you are putting your credit card details and authorizing the app with all details.

First, this is this app is founded by Kunal Shah, the person who started Freecharge and the startup is heavily funded. The past record of the founder is intact so you can trust the company.

Next point is that the CRED app never asks you to provide the date of expiry or CVV on your credit cards, hence you are not giving any critical information to this app.

Then, you should know that when you install any other app, those apps also get various permissions like reading your SMS, making calls on your behalf, tracking your activity etc, and this app is nothing different from others.

If you want, you can deny access to emails and messages then you won’t be able to receive a notification on due dates and also you won’t get any expense analysis.

Nothing is FREE in this world

While it feels great to get great offers and benefits and freebies, remember that nothing is FREE in this world. Behind everything which looks amazing, there is a business model and the reason why you get those free rewards and offers.

You should be aware that CRED or any other coupon company does various tie-ups and associations with brands and companies and acts as a lead generation company. You are nothing but a lead to some other company and CRED is helping in growing sales for the other party.

They will mostly get something back in return and that’s the business model. Nothing wrong with it, but you as an investor should be aware of what you are getting into.

The discounts and awesome benefits you get from CRED or any other similar app are basically tempting you to spend on the pretext of a “great deal”. If you spend on something which you originally did not intend to buy then it’s an extra expense for you at the end of the day. The coupons are pure rewards only when you were anyways going to spend on something and if you get an additional discount on the deal.

So, we need to be conscious while spending and getting discounts by using CRED coins, it should not happen that you are spending on some unwanted stuff to just redeem Cred coins.

Let’s take my example, I attended two live concerts in Pune, VIP pass of Rs. 5,000 each. No doubt I just paid Rs. 4,000 (Rs. 2,000 each) instead of paying Rs. 10,000. But, if this reward would not be in the pictures so, I would have never gone to that concert and saved Rs. 4,000.

Download the Cred App from here

Who should use this app?

The app is more suitable for the below-given categories of credit card users –

High credit card bill payers
People living in metro cities/tier 1 or 2 cities (most of the rewards are dining out or live concerts)
People who pay credit card bills before the due date (no reward on late payments)

Do let us know if you have any comments or questions regarding the app?

6 facts to know before you apply for credit card in India

Posted on January 22, 2015July 23, 2019 by Jagoinvestor

So you want to apply for credit card? That’s great, but are you well versed with the world of credit card? Do you know how does bank evaluate its potential credit card customers? Are you clear about your requirements and why are you so eager to get a credit card?

Most of the people do not spend much time to check which credit card is best for their requirement, but just grab the one that is offered to them for the first time. So today, I want to make sure I give you a sneak 360 view of the world of credit card and what all things one should be looking at before they apply for a credit card in India.

1. Your Income is important parameter for Credit Card Eligibility

When you fill in the application form while applying for a credit card, the lender asks you for various information like your age, city, take home income per month and type of your employment, which all is required to decide if you qualify for getting a credit card or not.

But out of those, your income is a very important parameter because that’s the main thing which determines your repayment capacity of your dues each month.

Someone earning Rs 50,000 per month is generally more eligible than someone who earns Rs 25,000 per month, because higher income is an indication that you will be able to pay your bills on time and on a consistent basis.

You income is also an important information for bank to set your credit limit at the time of issuing the credit card to you. You can see below a snapshot of HSBC credit card page and they have mentioned that the minimum annual income of a person has to be Rs 5,00,000 to apply for these credit cards.

income criteria for credit cards

So if you are earning good enough money, only then banks will be interested to give you a credit card. Make sure you do not apply for credit card just for the sake of it without a minimum threshold income. Also, note that you would need to submit your latest ITR copy for income proof.

2. Existing relationship with bank fastens the process

If you already have a salary account or saving account with some bank, it is relatively easier to get a credit card, especially when you have handled your accounts properly, I mean not have too many overdrafts, maintaining your minimum balance over the years and having a consistent flow of money in your account.

This is because the bank can easily verify your income details and see your activity and how responsible you have been over the years.

So for example, if you want a HDFC credit card, but you have salary account in ICICI bank, it would be recommended that you apply for ICICI credit card first (assuming it does not matter much to you). You can easily apply for the card online on bank website, and even bank will ask if you are an existing account holder in the bank or not. To which you can choose YES

existing bank account for credit card

If you do not want to apply online for your card, then you can also visit the branch and meet the representative face-to-face. Bankbazaar is a good portal to compare and apply for credit cards or any other kind of loans.

3. Your past credit history matters

It also matters how was your past credit history, if you are looking for credit card. If you have taken some personal loan, education loan or home loan and now applying for credit card (generally a second credit card), your CIBIL report will be checked by the company to find out how was your credit history.

Did you make your payments on time? Did you close all your loans and outstanding without any balance or not?

You can see a snapshot by cibil.com below which shows you what all documents are required by the lender before issuing various kinds of loans and it shows that the latest credit score and CIR is mandatory.

apply for credit card document

In fact the CIBIL report is now mandatory check for any kind of loan. Make sure you surely check your credit report once before you apply for your card.

4. Be clear about the purpose of credit card

There are various kinds of credit cards available with bank. You need to understand very clearly what is the main reason you want the credit card?

If you want to use the credit card primarily for dining and shopping, then you can choose the card which gives more benefit for that. If your main spending is on fuel, then there are cards which cater to that requirement. There are tons of ways you can get rewards and cash back on credit cards. It’s important to do a bit of research on this.

Below you can see some HDFC cards examples .

hdfc credit cards

Most of the credit card companies offer cards under categories like Silver, Gold, Platinum, and Titanium and then as per categories like Diners card, Fuel Card, Cashback cards. If you look at HDFC credit card page, you can see categories and various kinds of features as below

5. FREE vs. Annual Fee credit card

There are credit cards which are totally FREE for lifetime and then there are cards which come with annual fees ranging from Rs 99 to few thousands per year. Most of the people want a lifetime free credit card, which is totally fine if your credit card usage is basic in nature.

But if you have very heavy card usage and 40-50% of your spending happens on credit card itself, then it makes sense to go for premium credit cards, which have some annual fees, because those cards offer you awesome benefits and various ways to save money.

You get higher reward points and cash back in those cards. Also, they have special tie ups with airlines, hotels, shopping stores, fuel companies etc and you get maximum benefits by being a premium member.

For example: Those who travel a lot by airlines can look at Signature Credit Card from HSBC which has special tie up with Makemytrip and comes with annual fees of Rs.3,500, but gives lots of discounts and vouchers which can be used by the cardholder. You will not get these offers if you have a normal credit card.

Signature Credit Card HSBC

If you want to learn how can you use your credit card in more efficient way, a good resource is this article written by Shabbir.

6. You can also get credit card against a fixed Deposit

Do you know that you can also get credit card against fixed deposit open with a bank ? Yes – That’s possible . There are many banks, which will offer you a credit card, if you open a fixed deposit and want a card against it as security (These are also called Instant Credit Card).

This is very much beneficial for those people who are not able to get credit card due to low credit score and banks are rejecting their credit card application. So you can apply for a credit card if you are ready to open a fixed deposit and its also one of the good ways to start improving your credit score, if its messed up.

Below is a snapshot of ICICI Bank credit card page about instant credit card

credit card against fixed deposit

Most of the banks have a minimum threshold of Rs 20,000 fixed deposit to be opened with them and your credit limit is always below that FD amount.

So if you open a Rs 40,000 FD with bank and take a credit card against that FD, then your card limit might be 20-25k per month and if you default of payments for a long time, bank will break the FD and take their dues from it, so there is no risk for bank.

This is the reason that it’s much faster to get a credit card against a fixed deposit and there is no income proof required to get credit card against a FD .

Get set Ready

I hope you are now clear on various things before you apply for credit card from any bank. It’s very important to be very clear on your expectations from the card and for what purpose why you need it.

I would be happy to know your views on this and if you can give some tips to a beginner who is looking for cards for the first time

6 credit card myths – which can kill your financial life someday !

Posted on January 7, 2013August 6, 2019 by Jagoinvestor

One of the most used financial products is the Credit card. We all spend so much time to get best credit card, but I have never seen someone, who has spend his time to fully understands the importance of the CVV number, One time password, Signatures on the back of credit card or how secure their credit card is overall ! .

There are so many credit card frauds going on, and yet each of us thinks, that our credit cards are fully secure and it cant happen with us. However, this is really far from the truth, because of the 4 big myths people have about their credit cards and we will bust them today for you, so that you become a more powerful and informed investor!

Myth 1 – My Credit Card is secure, because no one knows my PIN/Password

When you make a transaction through a credit card in India, at the end of the transaction, you are asked to enter one more final PIN number, which makes your transaction more secure and gives you an additional layer of security. RBI had come up with this additional password requirement just last year. While you needed credit card number, expiry date and your CVV number to make a transaction earlier, now as an extra security layer, you need this additional PIN too.

However note that this is limited to online transactions on Indian websites only. When you make a transaction outside India, this additional step is not compulsory. This means that someone having every other detail of your credit card other than your PIN can also do transactions even if he does not know your PIN . You must have realized this yourself, if you have done any transaction outside India.

Myth 2 – No one knows my CVV number, so I am secure

One of the biggest myths about credit card is that, if no one knows your CVV number, its impossible to do the transaction. Take a small breath, while I tell you this.

“CVV is not always mandatory on all websites to make an online transaction.”

Yes, you heard right!. You can make a online transaction on few websites out of India with only the Credit Card number, the expiry date and obviously the name of the credit card holder. If you don’t believe me, here’s a small example.

Try to book a domain name at godaddy.com. I was almost numb, when I booked a domain name some time back, only to realize that the domain name was booked, but the site never asked me my credit card CVV number and I was like – “What ?! Seriously ?!” . I then found out, that asking for CVV number is just optional for credit card merchants. While some countries make it mandatory, others don’t. It’s just a choice!

So make sure you are safe, do this

Scratch your CVV number on the back of your credit/debit card
Always make sure the swiping happens in front of your eyes! , I know, it can be a little embarrassing for you, but its just an extra mile security, see if its possible for you
Better do not use Credit Card at all , use Debit card instead!

Myth 3 – My credit card can’ t be duplicated.

Yes, your credit card can be duplicated and it happens in India. A card (credit or debit) might be using something like EMV chips or Magnetic strips, and that’s where the problem is at. While EMV chips are more secure, the magnetic strips are not!. If your card has magnetic strips, it can be duplicated.

Here is how it works …

Your card has a lot of data inside it and it sits on the magnetic strip. When the card is swiped, all the data is extracted from it, for verification purposes. Now some expert hacker with bad intentions, can extract all this data from the swipe machine and make a new card using a technique called Cloning. There are machines called “skimmers” , which helps in extracting the data from the swiping machines to a new card. If you are still wondering if this all happens in India, here is a story excerpt from Hindu website

According to the police, the machines were used to swipe cloned cards by one Rahul. The cloned cards were arranged by Pankaj Deewan, Yogesh Mahajan and Yasin through their contacts. The amount transferred to Dheeraj alias Rohit’s account was shared by the machine holder and cloned cards holder at 40:60 ratio respectively.

Following this, the police launched a hunt and subsequently arrested Dheeraj, Pankaj, Yogesh and Yasin. They purportedly told the police that the domestic cards were cloned by one Kamal and international cards by Devender Chauhan of Agra with the help of a professional hacker. The cards were cloned by obtaining information of genuine customers and then copying the same on a plain card having a magnetic strip. According to the police, the accused used skimmer (a device used to copy data from credit/debit card) for the same.

And if you still don’t believe all this, here is a video you might want to spend time on

If you need more , read this incident on Credit Card cloning here

Myth 4 – The signature on the back on credit card does not matter much

One of the most misunderstood and unknown facts about credit cards is the signature on the back of the card. Let’s understand the rule today and lay this to matter to rest. If a credit card does not have a signature on the back, it’s an invalid card. As per the agreement between card issuer and merchant (the shops and hotels which give you the facility to swipe the cards), the merchant is supposed to check the signature on the back of card with the signature on the bill, and only if they match, the merchant should allow the card to be swiped.

However almost all the merchants avoid checking it, as if it does not matter at all. This is violation of terms and conditions and if you have lost a credit card which was SIGNED, and some transaction takes place, you are not suppose to be charged, because the merchant should have checked the signatures on card with the signature on the bill. What this means is that if there has been ever a fraud on your credit card, and you are asked to pay the money (Like this Incident) , just ask your card issuer to check the signature on the bill with your specimen signatures with them and if they do not match, they are not suppose to pay the merchant at all and let merchant take the loss for not doing their duty of checking the signatures.

This explains why you should sign your cards on the back and not leave them blank, because if someone steals your card and puts his signature on the back, then the transaction can be done successfully even if the merchant does his duty of checking the bill signature with the signature on card and in that case you are bound to pay the money to card issuer.

MYTH 5 – By paying minimum balance, I do not have to pay Interest

As you have used your credit card and now it’s time to pay your bills of Rs 15000. But you don’t have money to pay back the bill. You are in tension because if you don’t pay your bill you will be charged penalty. So to avoid penalty you pay minimum balance of Rs 3000 and now you will not be charged penalty. So now the left over bill amount is Rs 12000.

You must be happy that you will have to pay Rs 12000 only but let me tell you that you will have to pay Interest of 3 to 4% on this 12000. So even if you pay your minimum balance to avoid penalty but you cannot avoid the interest charged on the left over amount.

MYTH 6 – Too many credit card will improve my credit score

Many people think that if they opt for more than one credit card then there credit score will increase eventually. But this is other way round. If you opt for too many credit cards you won’t improve your credit score but you end up being more dependent on these credit cards, which is not a good sign. Managing too many credit card becomes burdensome.

Tips to Secure your Credit Card

I hope, now that these myths are busted, you are a more informed and powerful person who the rules of the game of credit cards . To summarize, lets put out some tips to secure your credit card

Do not share your one time credit card password (IVR) with anyone ever
Scratch your CVV number and remember it in your head !
While making any online transaction, make sure the website starts with https://
While making any transaction offline like on petrol pumps , hotels etc, make sure its swiped in front of you as far as possible.
Make sure the card is swiped on a machine which is issued by authorized banks and not some machine which looks suspicious , it can be a “Skimmer” machine which steals your data.
Put a signature on the back of your credit and debit card, so that unauthorized transactions are not done and you are protected a card holder
If possible, better use a credit card which has a small limit like 10k or 20k for shopping.
There are virtual credit cards these days, you can use them for online transactions

If you ever had any incident that was mentioned here, please share it with others and if you have some thing to teach others, please share it here with everyone.

Best Credit Card In India – Review of top 6 cards

Posted on July 30, 2012November 27, 2019 by Jagoinvestor

Most of the people who apply for a credit card in India, do not pay much attention at the time of taking the card, but later get frustrated by the card itself for various reasons high bad customer service, hidden charges, and several other factors. The obvious question then is, which is the best credit card in India? We did a survey on credit cards and tried to do a review of credit cards based on participants experiences. We will see how these cards rate in 6 important parameters. There were 654 participants who took the survey, hence you can safely assume that the collective responses will give a near reality results.

Best Credit card in India

If you see the chart above you will know that the 6 top credit cards in India are –

HDFC Bank Credit Card
ICICI Bank Credit Card
CitiBank Credit Card
SBI Bank Credit Card
Standard Chartered Credit Card
HSBC Credit Card

6 factors to look at before you apply for Credit Card In India

Let’s see those 6 parameters which you should look at before you apply for a credit card in India. At the end of this article, we will see the detailed results of the credit card survey and find out how different credit cards performed on each parameter so that if some particular parameter is more important for you, you can just pick a card based on that parameter.

1. The interest rate charged on credit cards

The first parameter to look at while choosing a credit card can be the interest rate charged by the credit card company. It can range from 1.99% on the cheapest credit card to as high as 3.5% per month on the most expensive credit card. For most of the people who pay their bills on time, this parameter will not matter much, but you never know when you might get into a debt trap kind of situation where you start using your credit card to the maximum limit and pay the interest per month, at that point of time this factor will really matter. Note that interest rate charged is mentioned on a per month basis, but a small difference of 1% can be very big, considering it on a yearly basis.

For example, a 1.99% monthly interest rate actually means 27% Yearly and 3.5% monthly means 51% yearly CAGR.

51% yearly CAGR ! … means your Rs 1 lac of credit card debt can actually increase to 7.9 lacs in just 5 yrs if you don’t do something about it and obviously you will run around to improve your CIBIL score later!

2. Annual Fees & Other charges

A lot of credit cards charge yearly fees and renewal fees (at the time of renewal). Now a lot of people hold a Free credit card for lifetime, but that’s just bunch of people who were given the credit card on a telemarketing call, mostly because they are working in some big company and chances are higher that their usage of credit card will be much higher than an average customer, hence the free credit card.

But, a lot of people apply for the credit card themselves and for them, there are yearly charges (annual fees) and another kind of charges which is applicable to everyone. For example, the penalty charges if you don’t pay your dues any due date. There are tons of customers who do not pay their dues on last time and just pay the minimum payment. If this happens a lot with you, then there is a great chance that you also live with the myth of minimum payments on credit cards. So apart from annual charges, there can be charges like

Charges when you pay your credit card bill by cash in any bank branch
If you make a demand draft from your credit card
If you request for a duplicate statement
And many other credit card charges .. the list is not a small one 🙂

Note that if your credit card is FREE as of now, it might carry annual charges when it expires and you apply for renewal – and credit card company says – “Sir, we gave it 100% free only till the card is valid, now its renewed! “

3. Rewards and Offers on Credit Card

There are a lot of advantages of using a credit card in the form of benefits and reward points. For example – You get PAYBACK points which you can use to redeem at various places like www.bookmyshow.com, and book movie tickets by redeeming those points. You also get cashback benefits if you use the card at selected HPCL petrol pumps and you don’t pay the fuel surcharge too.

There are many other kinds of benefits that many credit cards in India offer and those can be different from one credit card to another. This is one very important factor before you choose a credit card because a big number of people just take credit cards for these benefits and even if you are not looking for these, you might want it in the future at some point in time.

4. Customer Service and Transparency

Once I called my credit card company (which is ICICI Credit card) because I wanted to know if there will be any annual charges on my credit card as the expiry date is over and I wanted to renew the credit card. They gave me a very clear and satisfactory step by step answer which made me feel – “Great” .

There was no renewal charges and no annual charges even after renewal. So I was happy. Now it was not the FREE thing here which made me happy alone, It was the way customer care talked to me and treated me like a human:).

While there are instances when I was not that happy, but overall on average, I would still rate the customer service of my ICICI credit card as “good” . Well, that’s my experience only and others can have a bad or worse experience with the credit card company. Before you apply for a credit card, you need to look at this very critical aspect of customer service and how transparent are they overall.

5. Convenience to pay the bills

Something which you will deal with each month is the payment of your credit card bill. Now almost all the credit card companies allow paying by net-banking, cheque, cash and other ways. But still, some banks can be really torturing and not that supportive. It can be cumbersome at times. There have been instances when people paid by cheque before time and it was not processed on time and the person had to suffer because of that and had to run around to get back those charges reversed.

Here is the example

I got the CIR and there is absolutely no big hiccups except one in ICICI bank credit card (I had lot of issues with this bank and some late payments od 1-7 days in some credit cards in very few months. Never listens customer and pathetic customer care executives) of which the DPD is consistently not (000) good for last 5 months. But hey it wasn’t my fault. I dropped the cheque of overall due (about 12000/-) and they never bothered to inform me that my payment was not credited (god knows what they did with cheque). After 5 months when they made a balloon of charges and the whole amount jumped to 19000/- they called me and threatened me of CIBIL. I was never in the mood to not pay the due hence paid the whole amount 19000/- notified by them. Could this lead to this much low score?? – Link

Not to mention the unfair update on CIBIL report which affects you for years. So it’s a critical factor to look at before you apply for a credit card in India.

6. How easy was it to apply for credit card

Have you gone through a frustrating time applying for credit card, really had to run around to get a credit card even when you were totally eligible to get one. While this criterion is not that big, as its a one-time event still you can consider it before you apply for one. I recently had a hard time opening a saving account for my brother with ICICI bank because they had no way to accommodate people living on rent with friends, however, Kotak bank did it for me, at that point of time, the “ease of opening the account” was really a big thing for me. In the same way ease of applying for a credit card can be one important factor at times.

Best & Worst Credit Card in India as per Survey

Below are the results of the survey which we conducted on credit cards. Have a look at it.

Best Credit card in India

If you look at the above chart you will see that the best credit card in India turns out to be Citibank Credit Card and the second best is the HDFC Bank Credit card overall. However, this does not mean that other credit cards are not good at all the parameters. ICICI Bank credit card is very close to all the other cards in several parameters.

While the SBI Bank credit card and HDFC Bank credit card top the list when it comes to interest rates charged (means they have lower interest rates compared to others), but HSBC Bank credit card comes last. HBSC bank credit card has not done well in any parameter as per the survey and has the lowest ranking in all of them.

Average Credit Card bill for the last 6 months

86% of people are paying less than Rs 20,000 per month as there credit card bills, that’s last 6 months average. Whereas only 2% of people had more than Rs 50,000 bills per month. I suspect that these people must be using their credit card for various mandatory expenses which are required anyways. Lots of reward points and benefits to them:).

Best Credit card in India

Credit Card Reviews from participants

Ramakrishna says on his Citi IOC Card – I am using credit cards from past 9yrs. If u use the credit card in the right manner, u get the most out of it. And make sure you pay your outstanding amount before the due date. Most of the times, by end of month I am barely left with the liquid and credit cards used to save during that bad times and used to pay the outstanding by the due date. I never ended up paying any interest until now. The best credit card to date to my knowledge is Citi IOC card. I had made use of the rewards and offers at the extreme.

Kriprabha on Axis Gold Card – Very, very bad – due to careless service. 1) Not pointing out auto-debit facility – I missed one annual fee, so from 300/- bill went up to 1000+. 2) Not applying their own rules about marking a lien on my FD Receipt — my card was blocked for weeks and no one seemed to know this requirement, and they kept assuring me the card would be activated soon. As of now, the card is inactive – reason unknown. I am snipping up a card today – want to avoid AMC which they will apply happily! These bankers live and work in air-conditioned comfort which is possible due to high ABQ. I will soon terminate my “relationship” with them. I am a senior, living on savings, so these visits to the bank cost a lot in auto fares.

Raghavendra on HDFC Credit Card – Experience with HDFC Cards has been good. I have never looked at the interest option since I’ve always paid the outstanding amount by the due date. Was charged a penalty a couple of times when I paid the outstanding a couple of days after the due date ( had not even paid the minimum amount by the due date, owing to travel), but the same was reversed after a detailed email to HDFC Cards requesting for the same, in light of good payment track record except for the 2 instances. On the rewards front, HDFC Bank does not have a very good rewards scheme as compared to others. But customer service is excellent. They also have two billing cycles, one of the 25th and the other on the 5th and allow customers to choose any one of them. This is useful for those who already have a card and choose a second to make optimum usage and take advantage of the alternate billing cycles

Atri on HSBC Credit Cards – I am using HSBC gold credit card for more than the last 7 years. I always submitted payments in time and even insured the card purchases. It was as good at their services and also at the part of mine but I do not know why in their review they decided to cancel my card and stop their services to me. I even asked HSBC CUSTOMER representative but they could nor reply satisfactorily. I now feel I should have to get a credit card from the Public Sector Bank only and wasted my time and money. My message to all public is to use Bank Account / Credit Card only of Public Sector Banks like SBI, Canara Bank, Central Bank of India, etc. for a good governance in the nation. Thanks and Regards.

Some more data out of credit card survey

Only 10% of people had 4 or more credit cards
Around 42% of people had exactly 1 credit card with them
The average number of credit cards held by one person was 2.03

Other Credit Cards

Note that this survey is focusing on top 6 credit cards and their comparison with each other only, which came out as the result of the survey, but there are several other banks credit cards in market which can be considered, but due to small amount of feedback in the survey, it was not sufficient to conclude anything about them nor do any kind of review about these credit cards. Here is the list of those other credit cards

Axis Bank Credit Card
Amex Credit Card
Kotak Credit Card
Bank of India Credit Card
Indian-Bank Credit Card
Bank of Baroda Credit Card
IndusInd Credit Card
RBS Credit Card
Syndicate Credit Card
Andhra Credit Card
Canara Credit Card
Corporation Credit Card
PNB Credit Card
ABN Credit Card

Did this article help you in choosing the best credit card in India? Is there any other parameter to look at before you will apply for a credit card? Do you think this survey helped you in choosing a good credit card in India?

2 Credit Card Tips I learned from others

Posted on July 16, 2012August 22, 2019 by Jagoinvestor

Do you want to know some credit card tips which you can use in your life ? In all probability you must be holding a ICICI, HDFC or SBI Credit Card and must be wondering how to use it effectively ! . Credit card is used by almost everyone now a days and utilizing a credit card features is an art -I would say. It needs discipline, attitude and the right mindset to be used. However I came across 2 very good credit card tips, which were discussed by few readers on the comments section and hence this article bring forth those tips and tricks to you. These following tips are really good, but only for those who want to really squeeze out the benefit of their credit cards and not for someone who likes to keep it simple. Let’s see those credit card tips:

Credit Card Tips 1 – Making short term Fixed Deposits

Most people know that by the end of the month, they will get a credit card bill and they will have to pay a good amount of money towards it. Now imagine this situation – You will most probably have a good amount of money in your savings bank account which you know would be utilized towards paying off the credit card bill and you make sure that the money stays with your account. You don’t spend it or invest it anywhere because it already has a purpose and it also improves your credit score and report

Now the simple tip here is, that just see how much is your average credit card bill each month. It can be 10,000, 15,000 or 20,000 at times, but if you know that generally the maximum you get is around 20,000. Then instead of keeping that money in your bank account, you can just do a short term fixed deposits in that start of your billing period, so that instead of earning mere 4% in a saving bank account, it will earn some 7%. The idea is to create around 90 days of fixed deposit each month for your average credit card bill amount. So what will happen that from 3rd month, you will automatically get those FDs matured and you will have the money ready. I said 90 days so that the interest rates you get are better. I can see that my ICICI bank is giving 7% for 91 days deposit. If your bank provides good return in 30 days, better make 30 days deposits.

Important : Do this only if your bank provides the online facility of creating fixed deposits and you would like to get better interest for your money in short term along with eagerness to pay off your credit card debt in full every time. At time this can look like over optimization, but its up to you. Now if you like it, take it, else let it go. Thanks Suhas for this trick .

Credit Card Tips 2 – Have two credit card with different billing cycle

You can get the maximum credit of 55 days on a credit card if you make the purchase in the start of the billing cycle and have a grace period of 25 more days (30 + 25 = 55). But you can not always make big purchases in the start of the billing cycle to get maximum credit, a lot of people make this mistake because they do not understand minimum balance in credit cards . So in that case the tip is to have 2 credit cards with two different billing cycles preferably having a gap of 15 days between them, you can use one credit card for first 15 days of the month and another one in the second half. So for example you can have credit card A which has billing cycle from 1st Apr to 30th May and another credit card B whose billing cycle is from 15th May to 14th June.

So this way you can use the credit card A in the first half of the month and B in the second half. Note that though this involves 2 cards and requires a little tracking , but it will really help someone who uses the credit card a lot and would like to get benefit of maximum credit period almost all the time. Thanks Vareen for the tip.

What do you think about these credit card tips? Are they over kill!

Minimum Balance in Credit Card – How does it work ?

Posted on May 7, 2012November 28, 2019 by Jagoinvestor

A lot of people have no idea on how their credit card works and what is the exact interest applications. Credit cards are in the market mainly to make money from customers by charging them huge interest because they overuse their credit limit or just fall for the minimum balance option and get into a debt trap. Let’s first understand a few concepts like billing cycle and grace period to start with

How Billing Cycle in Credit Card works?

The billing cycle is the duration for which you are liable to pay the due amount. e.g. from the period 6th Mar- 5th Apr. It means that your bill gets generated on the 5th of every month. This bill includes all the transactions done in the last 30 days. If you buy something on 7th Mar, that transaction will appear on the bill generated on 5th Apr and if you buy something on 4th Apr, still it appears on the bill generated on 5th Apr.

What is the meaning of the Grace period?

A grace period is a number of days up to when you have the liberty to pay off your last bill. For example, if the grace period is of 25 days, in that case, you will enjoy no interest for the next 25 days from the recent billing date. In our example, as the billing happens on the 5th of every month. You can pay off the bill till the 30th of that month, but after that you start paying the interest if you don’t pay the bill in full.

A maximum number of days without interest?

So now based on this info, what is the maximum number of days for which you can enjoy interest-free credit?? The answer is the maximum 55 days! It’s because your billing cycle length is 30 days and grace period is 25 days, so if you purchase anything on the first day of your billing cycle, in this example say 6th Mar, then it will actually appear on your bill of 5th Apr (30 days are gone) and you still get 25 days to pay off this loan, so total 30+25 days = 55 days of interest free credit. However, if you buy anything near the end of your billing cycle, like 4th Apr, then that will appear on the 5th Apr and you can pay off that in the next 25 days, so in this case total 26 days of interest-free credit.

How Credit card billing cycle works

Now this means that if you have any large purchase or any big-ticket size purchase to be made, it’s always better to make sure you do it exactly at the start of the billing cycle to get maximum out of your credit card.

The myth of Minimum Balance

Do you know that you start paying interest on your balance outstanding even if you have Rs 1 in outstanding? Yes, if you don’t pay off your full balance by the end of the grace period, you will be charged with the interest from that point of time. Even if you pay off the minimum balance, still you pay the interest on the rest of the outstanding balance. A lot of people live in this myth that just because they have paid the minimum balance, they will not pay the interest and can pay off the rest of the balance next time without any interest. This is totally wrong!

Paying the minimum balance is just going to make sure that you are not charged any penalty for late fees. That’s the reason “minimum balance” is there. The worst part of this whole minimum balance thing is that once you have any outstanding balance in your credit card, the concept of the grace period is lost. You keep on paying the interest on your outstanding balance at the end of your billing cycle. The grace period concept will only return once the 100% dues are cleared.

Impact of Minimum balance in credit card

This is one big reason why the credit card outstanding balance ballons to such a big amount once a person starts paying the only minimum balance. Let’s understand this with a picture.

Minimum balance is to make sure you don’t pay full?

Minimum balance is a trick, pure trick to make sure you pay less and get into a debt trap. Credit card companies know very well, that if they do not give any option to pay the minimum balance, people will have no other option than to think “let’s pay off my bill in full”. But they know that if they put an option saying “minimum balance”, most of the people will then think – “Ok! this month let me pay this small amount and next month I will settle the full amount.” Sadly this is the first step for most people to get into the debt trap, and this cycle never ends. As this strategy is a lifeline of credit card companies, they make sure they take full advantage of this.

How Psychology Affects Your Payment Behavior

A recent research study concluded that when a person looks at the amount of “minimum payment”, it can influence how much of his balance he decides to pay off each month. The study looked at how people’s behavior changed when they saw a specific number as “minimum balance” and when they did not see anything as “minimum balance”.

A random sample of 481 Americans was taken and divided into 2 groups . One group saw a mock credit-card statement showing a balance of $1,937, and an annual interest rate of 14%, but they didn’t saw any “minimum payment” option. However one the other hand, the other group also saw that the minimum payment of 2% of the balance was mandatory.

What they found is that people who did not see any minimum payment number desired to pay a higher amount of their balance — significantly more than 2% . Whereas people who were shown the minimum payment number were inclined to pay closer to 2% (meaning they’d be in debt longer)

Example of Ajay paying Minimum Balance

Let us see an example to understand all the concepts and working of credit cards. Let’s take an example of Ajay
credit card payment example

Suppose Ajay pays a minimum balance of Rs 300 and carries forward the outstanding balance for next month and also spends Rs 5,000 more in the next billing cycle.

In this case, as Ajay makes the minimum balance of Rs 300, then his outstanding balance would be Rs 9,700 as on due date (30th Apr). Now his total interest will be charged on this Rs 9,700 and that would be 3% of Rs 9,700 = Rs 291, which will be added to his outstanding amount and his final outstanding amount would be Rs 9,991 (just Rs 9 less than his original outstanding amount). Now as he carried forward an outstanding amount on his credit card, there is no concept of grace period. Now in this billing cycle as he has spent another Rs 5,000. That will be added to his old outstanding and the total would now be Rs 9,991 + 5,000 = Rs 14,991

Now this time, suppose his minimum balance is Rs 400 (just for example), and he pays it, then his outstanding balance will come down by Rs 400 and his final outstanding balance would be Rs 14,991 – 400 = 14,591. Now as there will be no grace period, he will be charged the interest of 3% on his outstanding balance of Rs 14,591, that’s 3% of 14,591 = 437.73 and will be added back to his outstanding, 14571 + 437.73 = 15,008 (approx)

Example of how Credit cards works

You can see that even after making the minimum balance he is actually having more than his previous outstanding amount because of interest paid. In case he does not pay the minimum balance also, in that case, he will also be charged a heavy penalty for late payment and that will be added back to his credit card debt. You can see how the minimum balance gets one into a debt trap.

Making Minimum payment affects your Credit Score

Do I need to give any other reason why one should stay away from minimum balance whenever possible? Making a minimum payment means not making full payment on time and the more number of times you do it, the worse your credit score gets each time. Read more on Improving your credit score here

Conclusion

Now you know all the terminologies in credit cards and how it works exactly. You also came to know about how minimum payments work and how it gets you into a debt trap. Try to make sure you become more responsible for your credit card payments. What do you think about it ? Give your views about this