What is Credit Card?

Credit card is one of the most beneficial cards that our country provides. It comes with a bundle of benefits. You can avail lots of offers from your credit card. But the problem is most of us don’t know about credit cards and their usage that’s why today we will discuss all the frequently asked queries and their detailed answers. However, the credit cards have some disadvantages as well which we will discuss later in the article. 

In this article, we will discuss What is a credit card? Advantages and Disadvantages of the credit cards and many more things about this topic. So let’s start our discussion.

What are Credit Cards?

Credit cards are thin plastic cards issued by financial institutions, which look similar to the ordinary cards that our government issues, for example, ATM cards and debit cards. The credit cards come with the advantage of extra debiting cash. What does extra cash refer to? 

Let us take an example from here. Let us assume that your bank holds an amount of 25,000 but you are in a situation where you need 55,000. In these cases, the credit card helps us. If you are a credit card holder then you can debit 55,000 rupees from your account and later on pay the amount. 

This is the major difference between a debit card and a credit card. 

The debit cardholders can pay only from their bank account while the credit cardholders always have the advantage to shop extra and pay later. When you shop or buy anything from a credit card, the money will be deducted from your pre-approved limit.

Who can apply for Credit Cards 

Given below are some eligibility criteria to apply in any bank account for your credit card. Please note that different banks have different eligibility criteria. Before Applying, check your bank’s eligibility criteria.

Age: Age should be between 18 – 21 years.

Employment status: Self Employed or Salaried.

Average Salary: Salary must be between 1 lakhs to 3 lakhs.

Residential status: Residential or Nonresidential both can apply.

Documents to submit:

 1) Proof of income

 2) Proof of Identity 

 3) Statement of Account

 4) Passport-size photo

 5) Bank Statement

 6) Latest salary slip

Advantages of Credit Card

The credit card comes with lots of advantages. Most of the credit card users know them. Given below are some of them for the new users:

Surprises and Interesting Offers: A Credit Card user can enjoy many discounts and offers that their card provides. For example, cashback, points, discounts, coupon codes.

Useful in Hard Times: If there’s any kind of emergency and you need a huge amount of money at the instance and you can’t borrow it with your friends. Then what will you do now? If you have a credit card then you can debit money using it and after 30-50 days, you can payback or refund.

Credit Score Information: The individuals who have their credit card get information on their credit score for free. Yes, you heard it right. Nobody will charge you any fee in credit score information. 

Disadvantages of Credit Card 

Just like every coin has two sides. Similarly, every object or thing has some advantages and disadvantages. We have already discussed the advantages. Let’s now discuss their disadvantages. 

Credit Card frauds: In case you have lost your credit card then anybody can use it for their transactions because credit cards don’t provide any kind of OTP or Password before transactions. 

Penalty trap: Credit Card is not for irresponsible persons. Many people easily get caught in the penalty trap. To stay away from the penalty trap, always pay back before the last date.


Credit cards make you eligible to pay for your every single need and no doubt it is a lifesaver. However, some cases are noted which says, people spend more on credit cards and waste their money. The main reason behind it is when you borrow something on a Credit Card, you don’t have to pay right now. Which is a good feeling, you are getting your things without deduction of money.  However, just by staying in discipline, anybody can avoid this thing. If you decide to use Credit Cards wisely, then it can be the most profitable thing in your life.

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