Doesn’t it seem cool to be able to buy something and pay for it later? Actually, this is exactly what is possible with a credit card. So, what is a credit card, and what are its uses? You must have heard about Debit cards. In fact, a majority of people know how to use debit cards. This blog is totally dedicated to explaining What is Credit Card with all basic details.

What is a Credit Card?

A credit card is usually a plastic card with a unique number for identification. It is one of the most common forms of electronic payments along with UPI payments. Credit cards enable people to buy items without any cash. A credit-cardholder can buy goods and services using some pins/passwords/validation methods, etc. The issuer company of the card transfers the money to the seller in the form of credits. The customer gets some time to pay the credit card bill.

Now that we know what is a credit card, let’s find out how it works.

How does Credit Card work?

Let us say that you want to purchase something online or offline. You don’t have enough money to pay at that moment. You ask your friend for help but they are also unable to help. In such times, you can use your credit card! Using your credit card will help you with the purchase. You will only have to pay for it after a particular amount of time later. You can easily pay the amount within the due time. However, if you do not pay on time, you might be charged with interest and/or fine.

Credit Card versus Debit Card

Credit cards are a bit different from debit cards.

  • In the case of a debit card, we have a bank account linked to it. However, a credit card does not have an account linked to the card.
  • In debit card, upon any transaction, the amount is deducted immediately. However, credit cards provide you with some time, after the transaction, to pay back. (This time duration may vary according to each bank. Generally, the time duration to pay the bill is within 20days after you get the bill.)

How to apply for a credit card?

There are various methods to apply for a credit card. (The rules for applying for a credit card may vary according to different banks).

Generally, you have two ways of applying for a credit card in any bank.

ONLINE mode or OFFLINE mode.

The rules for both online and offline ways are almost the same.

Online mode

For the online mode of applying, you have to visit the related bank’s website and simply fill out the details that they are asking for. Some basic details the banks ask are:

  • name
  • phone no
  • email ids
  • address (address proof)
  • personal id proof
  • some basic details

Offline mode

For offline mode, you have to visit the nearest bank branch. Fill in the basic details asked in the forms there. The offline and online modes generally ask for the same details.

Who is eligible for applying for a Credit Card?

  • Generally, the people who have a job or have a business can apply easily.
  • Some banks, also, have a money deposit system to open a credit card.
  • Some private banks, also, provide credit cards on their own(check your bank’s terms and conditions)
  • In some banks, there is, also, a kind of student credit card

For more details, you can contact your nearest bank and their website. 

Merits and Demerits of using a Credit Card

Everything which we use for our convenience has two sides. If credit card has benefit, it also has some demerits. In the case of using a credit card, we have the following merits and demerits.


  • You can easily purchase anything within your limit just by using a credit card.
  • The credit card will help you when there’s no one to help you in a financial condition.
  • When you use a credit card regularly, you will get some exciting prizes (differ by banks)
  • Cashless transactions become easier.
  • You can pay bills for anything easily.
  • In education, it will help you in paying dues for your children.
  • For students, it will help in higher education.

If you are a student looking for further guidance, you can also visit our blog Education Loans – An Introduction (Are You Eligible?)


  • There will always be a burden of paying the due for the credit card.
  • Generally, the date to pay the bills of a credit card is 20 days after the transaction, after that, the bank starts adding some amount of interest. 
  • If you use the credit card in an  ATM to withdraw cash, you will have to pay a huge penalty after that. (for more details, visit the terms and conditions of your bank)

Uses of Credit Cards 

  • You can use credit cards almost anywhere. 
  • For purchasing, you can use it in malls/shops.
  • You can use it in the educational field. 
  • It can be used in some prepaid services. 

Do’s and Don’ts


  • You can use your credit card often, there is no issue with it.
  • Purchasing with a credit card will help you in getting exciting offers.
  • Always pay the bill of the credit card before the due date.


  • Never share the OTP, PIN, or personal information of the card with anyone.
  • Never delay in paying the bills of the credit card.
  • If you lose your credit card, immediately report to your bank

Some precautions –

  • Always protect your card from third-party apps.
  • A Credit card is something with a major role in your life, use it very carefully.

We hope that you found this blog useful for your personal and professional finances. You should also visit our blog 10 MAJOR Personal Finance Mistakes to Avoid for easing your financial life. Stay tuned to Blogger Bunny for more such information!