Credit cards have proved to be a boon to Indian consumers. The long-standing endeavor of the Reserve Bank of India to turn India digital seems to be yielding fruitful results, with millennials applying for new credit cards. Since India has a relatively young population of career-minded people, who want to scale up to the latest in technology and consumables, the atmosphere is conducive to credit card use. Still, India is slow to get on the credit card cart with abandon, and the population in developed countries like the United States of America use credit cards at around 30% more than Indians do. According to RBI reports, people in Tier-II and Tier-III cities are making more inquiries about applying for new credit cards.
As more and more Indians have Aadhaar cards, they have achieved, to some degree, eligibility to open bank accounts, as well as apply for new credit cards. Along with the Aadhaar card, banks and credit card institutions may require a person to have a minimum salary for a credit card. This is to ensure the payment of credit card bills is done on time. Around 90% of Indians own Aadhaar cards. Of these, individuals who have applied for new credit cards said that producing the Aadhaar card as a means of identity proof and address proof has simplified the process of getting a new bank account, and a credit card attached to it.
Know about credit cards
Selecting a first credit card is perceived as a challenging task by many. Yet, people want one, as they know that a credit card clearly offers benefits of affordability, with the peace of mind to pay back after a certain length of time. In order to make India go digital, the Reserve Bank of India has proposed several plans to coax people into applying for credit cards and make payments through them. A proposal for tax benefits with regard to the use of plastic money is awaiting approval.
This proposal states that there should be a 1-2% reduction in value-added tax for retailers, and establishments that accept payments via credit cards. Income tax rebates have also been proposed, for individuals who pay a specific proportion of their expenses through credit cards. With such incentives, as well as the earning potential coupled with technological advancements in general, the average salaried Indian is more than capable of obtaining a credit card and using it responsibly. Many products to improve the quality of life of Indians can be bought with credit cards, especially with EMIs and cashback facilities that credit cards provide.
Most of the basic credit cards require prospective cardholders to earn anywhere between Rs. 20,000 to Rs. 30,000 per month. However, premium cards would require the cardholder to earn a rather significant amount on a monthly basis.
Moving to plastic money
The shift from conventional methods of payment like cash and cheques to plastic money in the form of credit cards can be hard for many Indians. Nonetheless, the shift is happening. TransUnion CIBIL, an organization that reports on credit card inquiries and new applications, stated that inquiries for a first credit card in November 2020 were 106% of those received in October. This is a positive indicator for economic growth, and the sentiment of spending by Indians, signalling a return of growth to the dwindling Indian economy that took a massive jolt last year.
The right card for you
Various types of credit cards exist today. Depending on an individual’s requirements, plus eligibility criteria, credit cards are available with many fringe benefits like rewards and cashback offers. Credit cards may also provide discounts and special deals on certain brands, mainly during festival times, such as Diwali. All this is done to attract potential cardholders into opting for credit cards as a mode of payment, and you can get real advantages from having one.
The minimum salary for a credit card, according to the type you opt for, is mandatory in most credit card eligibility criteria. A valuable credit card to consider is the Bajaj Finserv RBL Bank SuperCard, which gives you the power of four cards in just one. You get rewards and cashback of 5% when you make down payments on items. Before applying for a credit card, however, ensure that you go through the eligibility criteria, and see if your earnings are enough to get you the credit card of your preference.