There is nothing right or wrong about using a credit card. I do not use one too much, but it has a role to play in life. YOU should use a credit card, but know the mistakes that we can commit or do commit…here is a check list.

The list is not in any particular sequence…but here it is!

1. The most important thing about a credit card is TIMELY PAYMENT: the day you get the credit card bill set up the payment mechanism. If you are confident of your credit card company, set up an automatic debit. Or just go online an make the FULL PAYMENT. Delays are EXPENSIVE.

2. Pay the FULL AMOUNT, ON TIME, EVERY TIME: Credit card companies send you a bill for Rs. 11,340 and in big BLOCK letters tell you MINIMUM AMOUNT TO PAY 1134 – which is about 10% of the bill. YOU NEED TO PAY 11,340 – the full amount on or 3 days before the DUE DATE. Always.

3. Do not use the card to the FULLEST every time: There is no need to use the card to its fullest.

4. Do not use the card for friends ESPECIALLY if you are not sure whether they will pay you, and when they will pay you.

5. If you have 2 cards, carry one around and leave one at home under lock and key…especially if it has a limit of Rs. 5L !!

6. Read the bills – and the charges. BFSI is not exactly the most trusted industry today, is it?

7. do not buy more just to get points. Makes no sense.

8. If you do run up a bigger debit balance than what you can pay, take a personal loan, beg, borrow from parents, spouse, friends and make the balance NIL. Interest rates of 42% p.a. are difficult to beat, right?


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  1. do not buy more just to get points. Makes no sense. – VERY VALUABLE. MANY GET LOCKED DUE TO THIS…

  2. A suggestion
    If you a limit of 5 lakh and you are only using say Rs 20,000 a month then you should get your credit card limit reduced.

    We can complain about BFSI and all Just like we can complain of the ads and complain that they tempt us to buy. Woh kehte hain na If you point one finger to others, four fingers point to you.
    Keep on reading subramoney(if interested can read bemoneyaware too), learn and execute.

  3. bemoneyaware YOU run a financial website? and you say this? please update your knowledge of credit cards. Not sure if subra decides to reply to your post. I hope he does. I think it is a completely stupid idea. the purpose of a 5L card is diff from a 20k card.

  4. Pooja yes I do run a personal finance website called It is among the top 10 websites of personal finance in India (going by Alexa ranking).
    Just because your credit card provider increases your credit limit , it does not mean you should not get it reduced. If a is person earning 1 lakh of rupee with a credit limit of 3 lakh and he spends Rs 50,000 maximum on the credit card. Then what should be his credit limit? Especially in the case when he has two credit cards.
    The limit hurts when the credit card is mis-used and you have to wait to prove that you haven’t spent that money.

  5. wow! Subra Sir is your blog in the top 10?

    Pooja you read that link which Subra sir has sent and still saying that? do you realize why people keep 2 cards? one for regular use and one exclusively for emergencies like a hospital admission? and that card can be kept under a lock n key? and it should be used once in a while – just to keep it going?

    Subra Sir – sorry, I had to take this panga. You can delete it in case you wish to, I will not feel bad 🙂

  6. Sir I also realise that popularity does not mean accuracy. I USED to follow another ‘popular’ website, but just stopped when I found such dramatic mistakes and mis selling there!! oops

  7. Even after many years, I still could not convince myself to use the credit card for normal use.Looking at the interest rate and misuse of card, hence I prefer and using debit card.

    Credit is such a beautiful term given to borrowing. Actually if I am right, it means to pay later in a business transaction(usually with no interest).

    If you don’t have money, why you have to spend it?

    There is a saying in Ramayana while describing the situation of Ravana after he lost all of his relatives in war. It says, (Kadan pattar nenjam pol kalanginan ilangai vendan — TAMIL) “Ravana cried/sad like the person who borrowed money and stuck with it in vicious cycle”

    But Subra’s point on using for emergency makes sense. So for emergency, can have credit card with huge limit and keep it under lock and key along with your health insurance documents :-). Use it 3 months once to pay say electricity bill and pay to the card back immediately(Just to keep the card active).

    Well, this is my comfort level 🙂

  8. Pooja, it’s good to have readers who can ‘take panga’ on your behalf.
    Thanks for enlightening me on need for the two credit-cards.

    As Shankar said Idea is to find the comfort level and each person’s outlook is different. My comfort level.. well let me keep it for my blog.

  9. and Shankar do you realize that using a debit card is far, far, far riskier than using a credit card? My credit card no. 1 has about 55k as a limit – so my damage on that card can at worst be Rs. 55,000. My debit card can wipe out my bank account – which regularly sees 7 digit balances – i prefer using a low end / lo limit credit card.


  10. by the way Pooja I have no clue about my ranking. Once in a while I get a message / email talking about ranking, but I am indifferent to it.

  11. Credit cards if used wisely can help you make money (on your daily expenses). I do have 3 cards for different purpose. One for fuel, one for grocery(big bazaar), and one for other regular expense. I do get anywhere from 1% to 4% money back this excludes any interest savings of amount kept in bank till payment due date from date of purchase. The catch is to ensure you pay on or before due date. With world of NEFT you can schedule as soon as you get the bill for the due date. Also CC chance of duplicate charges or duplicate debits is very minimal compared to debit card.

  12. Hi Subra,
    That’s a valid point. Actually, I am also following the same technique but with debit card. My debit card which is in my wallet, I keep maximum of 20K. My salary account debit card under lock and key, using it very rarely and only for online purchase like insurance renewal,etc.

    In my wallet debit card, if the amount goes less than 10K, I used to load money.

    This way I can decide how much money I want to carry in my wallet(much more flexible, if I want I can in increase the lower limit) and even if I lose my wallet, I should not lose sleep for more than one day 🙂

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