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16 SEPTEMBER, 2022
Since people are gradually getting more comfortable with using credit cards, its usage has grown significantly in the past few months. It is an excellent option for anyone who is in need of immediate money with the flexibility to repay.
Credit cards allow cardholders to borrow immediately from lenders up to a specific credit limit sanctioned for the card. Apart from that, the best credit cards in India also offer various types of rewards to the customers. Credit cards can help to cover immediate expenses such as shopping, bill payments, travelling, food, and similar expenses. Apart from that, many credit cards in India have the advantage of withdrawing cash by using credit cards. These facilities and benefits make credit cards double-edged since they act as both credit and debit cards.
How does a Credit Card Work?
A credit card works like a tool for the cardholders to borrow money from a lender who has issued the card. Credit cards have been issued to trusted customers after some background checks and verifications; thus, the lenders allow the cardholders to borrow money from them whenever they want to. A credit card not only lets you spend when you have a financial crunch, but it also allows extra rewards such as exciting offers on food and apparel, grocery shopping, airport lounge offers, and so on.
A credit card holder has to pay a minimum fee yearly for the card maintenance change, and also, there are some interest charges applicable on the credit card purchases depending on the type of card, lender, and product.
Generally, there is a joining fee and an annual fee on these cards, and on many occasions, these joining and annual fees can be annulled under specific conditions.
What is Credit Card Rewards?
Credit cards allow you to spend money and add additional rewards. Credit card rewards are additional offers for the borrowers credited against the expenditure. This is one of the main benefits of using a credit card instead of a debit card. Kotak Mahindra Bank offers the best rewards for credit card India since their credit cards have customized rewards for individuals.
Credit card Reward points are allowed to be redeemed in exchange for attractive offers on various deals. These offers are specially designed for individual borrowers by tracking their expenditure activities. These special offers might include offers in the field of food, dining, groceries, clothing, jewellery, travelling, and many more.
There are various different types of Credit card rewards, and some of them are:
Moreover, the cardholders can choose from these rewards, which allow additional flexibility. For example, with Kotak’s Mojo Platinum Credit card, it is possible to get all of these mentioned rewards while spending on your expenses.
While most credit cards have some reward facility, there are certain factors on which these reward points depend:
1. CIBIL Score:
CIBIL score or your credit score plays the ultimate role in deciding your credit card eligibility. To get a credit card sanctioned, you must have a credit score above 750. The credit score is between 300 and 900; any score above 750 is considered required for credit card eligibility.
This credit card credit score is affected by your past use of loans and credit cards. If you have missed the due dates of loan repayments or credit card bills, you are most likely to have a low credit score. To ensure the best credit card in India, one must meet the criteria of a 750+ credit score. This credit score is easy to build by paying your dues timely. If you have an ongoing loan, you can improve your credit score by paying the EMIs before the due date.
Hard and soft enquiries also impact the credit score.
While a soft enquiry will not affect your credit score in any way, a hard enquiry can have negative impacts.
2. Type of Card:
The card type is also important in deciding the best rewards credit card in India because the reward points depending on the card. For example, while the Kotak IndiGo Ka-ching 6E Rewards XL Credit Card has an array of offers regarding airport lounge access and dining vouchers, the White Credit Card by Kotak offers exclusive VIP access to events that are exclusive to only specific people. It shows how the type of reward depends on the type of card.
3. Type of Lender:
Before choosing your credit card, check for the available reward options on that card. The type of lender also depends on the card type because not every bank or NBFC offers similar reward points to the borrowers. Some banks offer most rewards through discounts, while others add added benefits like charge waivers.
The credit score of a person or the CIBIL score is one of the main aspects which affects your chances of getting a credit card with excellent reward options. Apart from that, the type of card and the type of lender also affect the chances of getting great best rewards credit card in India. Credit cards have great advantages regarding flexibility and added benefit, and if used responsibly, you can avail the rewards in no time.
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