Money Basics · Credit cards & CIBIL

Your first credit card

A credit card is not free money. It's borrowed money with a 45-day interest-free period, if you repay the full balance by the due date. Miss that, and it becomes the most expensive debt in India.

The right way to use a credit card

Rule 1: Pay the FULL outstanding amount by the due date every month. Not the minimum due. The full amount.

Rule 2: Spend only what you already have in your bank account. The credit card should feel like a debit card with rewards.

Rule 3: Set up auto-pay for the full amount from your bank account. This eliminates the risk of forgetting.

> The credit card's grace period is 45 days. Spend on the 1st → bill generated on the 30th → due on the 15th of the next month. That's 45 days of free credit.

Getting your first card

Without a credit history, banks are reluctant to issue unsecured cards. Options:

• Secured credit card: backed by a fixed deposit you place with the bank. Most large banks offer one. Your limit = 75–85% of your FD amount.
• Entry-level cards: several issuers run a zero-joining-fee or no-annual-fee tier aimed at first-timers. Compare the fee waiver conditions, not the launch offer
• Salary account relationship: your bank may offer a card based on 3–6 months of salary history

36–42% + GSTAnnual interest if you carry a balance. GST at 18% is charged on the interest itself, so the real cost runs nearer 42–49% (don't do this)

₹0Cost of credit if you pay full amount monthly

Building credit from zero

Get one card. Use it for small regular expenses (groceries, subscriptions). Pay in full every month. Your score builds within 6–12 months. Then you qualify for premium cards with better rewards.

Takeaway. Pay the FULL credit card balance every month, never just the minimum. Set auto-pay. A credit card costs nothing if used correctly and builds your credit score.