The Complete Guide to Credit Cards
Maximize benefits, avoid pitfalls, and choose the perfect card with Gromi Finance
What is a Credit Card?
A credit card is a payment card issued by financial institutions that allows cardholders to borrow funds to pay for goods and services. Unlike debit cards that draw directly from your bank account, credit cards provide a line of credit with a set limit.
Pro Tip: Credit cards offer a 45-55 day interest-free period when you pay your full balance by the due date.
How Credit Cards Work
Understanding the key components will help you use credit cards wisely:
Credit Limit
The maximum amount you can borrow, typically ranging from ₹10,000 to ₹10,00,000 based on your creditworthiness.
Billing Cycle
Usually 30 days. All transactions during this period appear on your monthly statement.
Minimum Payment
Typically 5% of your balance. Paying only this incurs interest on the remaining amount.
Warning: Only making minimum payments can lead to long-term debt due to compounding interest.
Types of Credit Cards
Earn points, miles, or cashback on purchases. Best for everyday spending.
Gromi Recommendation: Gromi Cashback Card (5% on groceries, 3% on dining)
Offer travel perks like airport lounge access, air miles, and hotel discounts.
Gromi Recommendation: Gromi Travel Elite (4x points on flights)
Require a security deposit. Ideal for building/rebuilding credit.
Gromi Recommendation: Gromi Starter Card (No credit history required)
Smart Credit Card Hacks
- Utilization Magic: Keep credit utilization below 30% (ideally under 10%) to boost your credit score.
- Payment Timing: Pay most of your balance before the statement date to show low utilization.
- Bonus Stacking: Combine card rewards with store promotions for maximum savings.
- Fee Waivers: Politely ask to waive annual fees after 6-12 months of good usage.
- Purchase Protection: Use credit cards for big purchases to get extended warranties.
Advanced Hack: Some premium cards offer complimentary subscriptions to Netflix, Amazon Prime, or airport lounge access worth more than the annual fee.
Ready to Find Your Perfect Card?
Gromi Finance helps you compare cards based on your spending habits and financial goals.
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