Swipe with Confidence: Exploring the Meaning of Credit Cards and Their Benefits

credit card meaning

A credit card is an amazing tool provided by banks and NBFCs that comes with an already set amount. This lets the cardholder buy things and pay for them later. You can clear the full amount you spent without any extra charge, and you have around 50 days from when you purchased it to do this.

If you still don’t get the credit card meaning – In simple terms, with a credit card, you don’t have to go through the hassle of visiting the bank to get a loan and explaining why you need the money. Instead, you can use your credit card to buy whatever you want, only paying interest on the part you haven’t paid off yet, and settle your balance when it suits you. Credit cards have revolutionized shopping by making it easy to get credit whenever needed. You might have credit cards from different banks, and it is pretty normal for anyone to use a card to cover their expenses or pay for services.

What is a Credit Card?

A credit card allows you to make purchases and pay for them later. When you use a credit card, you are essentially borrowing money from the company that issued the card. You will need to repay the borrowed amount by the end of the month. To understand the credit card meaning and before you decide to get one, there are a few key things to know:

  • People with a steady income are usually eligible to get credit cards from credit card companies.
  • If you have a good credit score, getting a credit card is easier.
  • As a credit card holder, you will have a credit limit set for you. This limit is typically three to five times your monthly income, but it can vary depending on the bank.
  • While big banks offer credit cards, Visa, MasterCard, and RuPay provide the actual payment system. These payment providers can’t impose additional rules on the card. The credit card companies determine details like the minimum payment due, interest rate, and rewards.
  • You can even use a fixed deposit to get a credit card from financial institutions like Kotak Mahindra Bank.

Benefits of a Credit Card

  • Convenient Credit Access:

You borrow money from the card issuer whenever you use a credit card to pay for something. If you repay this borrowed amount before the due date, you won’t have to deal with extra costs like interest or fees. This setup lets you instantly buy things and avail of services, deferring the payment until later. This way, you can avoid touching your savings or your bank balance. With a credit card, you can access credit whenever you need it, wherever you are.

  • Reliable for Urgent Situations:

Using a debit card means the money comes directly from your bank account. But with a credit card, it’s a different story. When you use a credit card, you borrow money from the company. This can be especially useful during unexpected emergencies when you’re short on funds. You can use credit card payment for online or offline transactions and then settle the debt at a more convenient time.

  • Deferred Payment Option:

One of the major perks of having a credit card is buying things you love immediately and paying for them later. Depending on the kind of credit card you hold and the timing of your transaction, you can delay paying for your purchases for a period ranging from 20 to 50 days.

  • Rewards and Cashbacks:

These cards come with the perk of earning reward points every time you use them. Take, for instance, Kotak Mahindra Bank’s Myntra credit card. You can enjoy 7.5% discounts on Myntra platforms and get two complimentary PVR tickets every quarter.

  • Valuable Insurance Coverage:

Credit cards offer more than spending power, often including personal accident coverage and comprehensive travel insurance. This makes credit cards quite appealing due to the substantial benefits they provide.

  • Simplified Travel Experience:

The utility of credit cards during travel cannot be understated. For instance, with Kotak Mahindra Bank’s Money-Back credit cards, you can enjoy a unique travel experience by accessing complimentary airport lounges. You are also entitled to food discounts at over 1000 restaurants across India. These travel-related benefits enhance the value of credit cards even further.


Owning a credit card can be a valuable tool for handling your finances when you are facing a shortage of cash. A credit card payment provides the means to easily access funds, make purchases, and settle the owed amount. The best advantage lies in the wide usage and acceptance of credit cards. If you want your first credit card, ensure you understand the terms and conditions thoroughly before deciding.

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