Does It Make Sense to Have A Credit Card in India – Pros and Cons

Credit Card

Credit cards have become a necessary part of our lives due to their ease of use and convenient payment options. They offer unique discounts, deals, and offers on other financial products, and most of these are free credit cards, making them an excellent choice for Indians. 

However, if you don’t use them properly, credit cards can become burdensome when you spend more than you can afford to repay the bills. For those new to credit, weighing the pros and cons of using your credit card is essential.

Rise of Credit Card Usage in India: Cash vs Card

Over the past decade, the usage of credit cards has surged in India, with public and private banks such as Kotak Mahindra Bank offering a variety of card options to consumers. As technology has improved, credit card usage has risen rapidly, and the trend has been further fueled by the increase in online payments for almost everything.

One significant factor that has contributed to the rise in credit card usage in India is demonetization, which led to a shortage of currency flow, and people turned to cards to keep up with their monthly purchases. According to the Reserve Bank of India, in January 2018, over 36.2 million credit cards were used nationwide.

Despite the advantages of credit cards, many people still wonder why they should get one when cash is accepted everywhere, tangible, and doesn’t accrue interest. While these are valid points, credit cards provide several benefits, such as helping you keep track of transactions, enabling you to make significant purchases, and providing rewards points and discounts. They are also instrumental when you need to make sudden payments.

Pros and Cons of Having a Credit Card


  • Advantageous Deferred Payment Option

A significant advantage of credit cards is the option to defer payment. This allows cardholders to make purchases and pay for them later, making credit more accessible. Unlike debit cards, credit cards do not debit your bank account every time you use them, giving you more flexibility and control over your finances.

  • Simplified and Streamlined Application Process

Applying for a free credit card has become significantly more straightforward than the cumbersome process of 2008. Banks are now more willing to provide their account holders with credit cards, making the process more detailed and accessible.

  • Establishing a Credit History

Using a credit card helps you create a line of credit, and the bank receives a complete history of your payment schedule and usage. This can lead to a good credit history, making it easier to obtain loans from the bank in the future.

  • Detailed Record of Usage and Budgeting

Credit card statements are sent out at the end of every month, providing a detailed record of all payments made, available credit, and outstanding balances. This feature can be incredibly helpful in outlining a budget. Banks also send SMS or email alerts whenever a card is swiped, creating an additional security measure against theft.

  • Various Incentives and Offers

811 credit card provides numerous incentives and offers that banks advertise to attract potential customers. These offers include discounts, cashback, and reward points that can be used for future purchases. 


  • Hefty Interest Rates

One of the significant drawbacks of using a credit card is the high-interest rate charged by banks. On average, it ranges from 2-3% per month, which can significantly increase the cost of borrowing. Moreover, if you fail to pay the bill on time, the interest rate and other penalty charges can add up quickly, making it challenging to pay the outstanding amount.

  • Temptation to Overspend

Credit cards offer the convenience of easy spending without the need to carry cash. However, this can also lead to overspending, as people tend to underestimate their expenses and forget to keep track of their spending. Having multiple credit cards can exacerbate the situation, as users can quickly accumulate debt if they use all of them without keeping a budget in mind.

Also Read: The Role of Credit Card Companies in Regulating and Enforcing Responsible Credit Card Use

  • Debt Traps

Using a credit card recklessly can quickly spiral into a debt trap. Many people make the mistake of paying only the minimum amount due, which does not cover the entire bill and only reduces the interest charges. This leads to a vicious cycle of accumulating more debt and paying higher interest charges, ultimately leading to financial distress.


When considering the necessity of a credit card, it is essential to weigh the advantages and disadvantages. Getting an 811 credit card entails significant responsibility, but its benefits are undeniable.

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