As Credit Card Spends boom Some Points new Customers Should know

Credit Cards are the most easily available and accessible credit instruments in the market today. The Reserve Bank of India has reported an increase in credit card use by around double digits. If we take a look at the figures, there are around seventy-seven million credit cards that are outstanding in India in the year 2022.

This is approximately twenty-three per cent more than the figures that were seen in India in 2021 and a hundred per cent more than the figures that were stated in the year 2018.

The spending capacity of people has increased and thus the expense of credit cards has also seen a rise. The average spending on credit cards in the year 2022 is Rs 4,781 and the average spend on credit cards in the year 2021 is Rs. 3,751. This average spending is including online, POS transactions and ATM transactions.

The rewards on the credit cards have without a doubt invited customers to buy more credit cards and spend using them.

Let us know some of the factors that first-time customers should be aware of

Compare Options

As the credit policies have been relaxed, credit cards are more easily accessible.  The fintech companies that have been booming in the market now have been offering attractive options to first-time users and people who have never borrowed credit. Customers can choose between these options.

The best option for you is either the one that lets you access the lifestyle that you want or is supporting you to maintain the same lifestyle. With the above idea, you can narrow down your search and find a suitable option.

Timely Payment

This is the most important factor to be aware of while borrowing credit. Anything that is borrowed has to be paid back. Carrying forward the minimum amount will attract penalties and extra charges will be payable to the lender.

People use a credit card for a lot of reasons like traveling, shopping, fuel purchase or even for buying groceries. By making timely payments you can minimize the interest charged on these transactions and also earn the rewards.

If you are using a credit card for grocery shopping and you do not pay the amount in time, you are violating your own budget and making groceries expensive for yourself.

You can set reminders or make auto payments towards credit cards so that no payments are missed and are paid on time.

Credit Utilization and Credit Score

However large your credit limit may be, it is advised that you spend a maximum of 30% of the limit monthly. If the utilization of credit is more than this, the Credit Score might get affected. If you spend within the limit, it is easier to repay the debt and does not overburden your budget for a time period.

A low credit utilization ratio will help you to maintain a good credit score. If you have a good credit score, getting new loans is easier and it enhances your creditworthiness.

A score of 750 and above is considered to be a good credit score. You should regularly check your credit report and amend the details if necessary. You can also improve your credit score by using Credit improvement services. Best loan offers can be availed by those who have good credit scores.

Safe Digital Banking

With the pandemic hitting us, most of the banking services have started online. Paperless banking has now become a reality. But, with online transactions taking place, there are chances of fraud to increase. The digital banking process involves paperless banking starting right from completing KYC requirements to providing credit online.

Some basic safety measures like not sharing your CVV and your one-time password to transactions are to be followed by the customers. First-time users of credit cards should make sure that they are in phys

ical possession of their credit cards all the time. The expiry dates of credit cards should never be shared over the phone or on any media.

Know your Charges

The use of credit cards comes with a price. There are various charges that are levied on credit cards. The first-time user should be aware of these charges and the penalties if the charges are not paid in time. The annual percentage rate, annual charges and minimum payment required are some of the terms that the credit card owner should be aware of before transacting with the credit card.

Your first credit card might be offered to you with a very low-interest rate charge. These are called introductory charges and the rates are quite low. But make sure the time for which these charges are offered. If you plan to make any major purchases you can avail of these offers on credit cards.


In the last two months, the Reserve Bank of India has increased the interest rates by 90 basis points and thus owning a credit card has become expensive. The retail economy in the country is going strong as well as spending has also increased in the current year. With the rise of using credit cards, the interest rates may become more favorable.

Credit card users should make sure that all the above points are kept in mind, and that they do not overspend or misuse their credit cards. The basic precautions taken should make the use of credit cards easy and affordable for you. With a wide variety of cards available in the market, it is easy to find the best-suited card for you.