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Kolkata: Once upon a time, not very long ago, credit cards were regarded as instruments of the well-heeled in India. Even if middle-class would keep one, it would be best used for emergency use. However, times have changed fast and a credit card revolution is sweeping the country. According to RBI data, the number of active cards in India grew by more than 100% from about 5.5 crore in 2019 to more than 10.8 crore by the end of 2024.
The annual spend through credit cards sailed past Rs 21 lakh crore in FY25. Against this backdrop, credit card issuers must be taking a lot of heart from the fact that card penetration is low in India at about 5.5%. The comparing data on China is more than 40% and in the US, more than 70%. Credit cards have now turned into an instrument of everyday use. They are used for both online and offline shopping in almost all types of situations -- groceries, shopping malls, travel agents, hotel booking, airline booking, petrol pumps, pharmacies, movie halls, diners etc.
Credit cards offer a lot of benefits. Though they carry very high interest rates, credit cards also offer cashbacks, reward points and various other advantages at airports, concierge services etc. However, credit cards also carry an annual fee, the amount of which varies from card to card. Let's have a look at a few cards that demand only a small annual fee
Amazon Pay ICICI Credit Card: It does not charge any joining or annual fee. This card also offers a low forex markup fee, i.e. 1.99% and provides benefits for both Prime and non-Prime members. Unlimited earnings and high reward points are the USPs of this card and reward points have no expiry.
Flipkart Axis Bank Credit Card: The annual fee for this card is Rs 500. The issuer waivers annual fee from the second year when annual spends exceeds Rs 3.5 lakh. Cardholders are entitled to earn 7.5% cashback on Myntra spends and the ceiling for this benefit is Rs 4,000 per statement quarter. The user is also entitled to 1% fuel surcharge waiver on fuel purchases at any petrol station in the country.
SBI Cashback Credit Card: The annual fee is Rs 999 plus taxesIf the annual expenditure through it crosses Rs 2 lakh, the renewal fee is reversed in the following year. The user is also entitled to 5% cashback on online spends without any merchant restrictions. There is 1% cashback on offline spends too.
IDFC FIRST Millennia Credit Card: It is a lifetime free credit card. In other words, there are no joining or annual fee.
Axis Bank ACE Credit Card: The annual fee for this card is Rs 499. This amount is waived off from the second year if the user spends more than Rs 2 lakh. Besides this benefit, there are 5% cashback on bill utility bill payments such as electricity, internet and gas. This card also carries the benefit of four free lounge visits per calendar year.
HDFC MoneyBack+ Credit Card: The annual fee for this HDFC Bank card is Rs 500 plus taxes. This cards offers 10X cashpoints on Amazon, Flipkart, Swiggy, Reliance Smart Super Store and BigBasket. The users o this card are entitled to 2 cashpoints per Rs 150 spent via other platforms.
However, there is a word of caution. Credit cards carry the highest interest rate among all instruments of retail credit. It can be upwards of 35% annually. Therefore, it is easy to land in a debt trap if an individual uses a credit card injudiciously. So, one should not indiscriminately apply or obtain credit cards. The best way is to consult a personal finance advisor before obtaining a credit card.
