A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company, which allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment. Credit cards impose the condition that cardholders pay back the borrowed money, plus any applicable interest, as well as any additional agreed-upon charges, either in full by the billing date or over time.
When you open a credit card, you receive a credit limit. You'll be able to spend up to that limit. When you make a purchase with your card, it will show up as pending on your account and post within a few days. Once the transaction is posted to your account, your total balance will increase. In order to keep your account in good standing, you'll need to pay at least the minimum amount by your due date.

Types of Credit Cards

• Rewards credit cards
  Rewards credit cards typically give you points or cash back based on a percentage of your spending and some even offer bonus points in popular categories like groceries, gas and dining out. Rewards credit cards also tend to offer at least a few different ways to redeem your points, often including options for statement credits, gift cards or merchandise. By using a rewards credit card to cover your basic purchases like groceries and household supplies, you can earn cash back and travel rewards for purchases you needed to make anyway.
• Cash back credit cards
  It makes it easy for you to earn cash back or statement credits on your spending, although how rewards are doled out varies from card to card. Some options in this niche offer a flat rate of rewards while others offer bonus points in certain categories like dining or travel. Some even offer bonus rewards in categories that change each quarter, as well as a flat rate of rewards on all non-bonus purchases. Many cash back credit cards come with no annual fee as well, although some with more generous bonus offers and rewards schemes charge annual fees on the modest side. If you tend to spend more in particular categories, like groceries or dining, you might choose a bonus category card rather than a flat rate card, which is ideal for those with varied spending looking for an everyday card.
• Travel credit cards
  Travel credit cards offers the opportunity to earn rewards that are geared specifically toward travel, whether that means earning flexible travel credits you can use toward any travel purchase or even points you can transfer to airline or hotel programs. Some travel credit cards also let you earn points within a specific program, such as a frequent flyer program or hotel loyalty program.
  If you often travel for business or pleasure, you can also keep your eye out for luxury travel credit cards. You don't even have to leave town to start earning points and miles that can make your next trip more affordable.
• Balance transfer credit
  If you have some high-interest credit card debt on your hands, you may be considering using a balance transfer credit card to help manage and pay down that debt. The best balance transfer cards let you secure an introductory 0 percent APR for a period typically between 15 and 21 months, which can give you a nice break from paying interest charges while you focus on paying down your debt. Most cards require you to pay an upfront balance transfer fee of 3 percent or 5 percent, although there are some credit cards with no balance transfer fee. Still, even after taking the balance transfer fee into account, you could save a significant sum of money on interest during your card's introductory APR offer.
• Zero percent intro APR credit cards and low-interest credit cards
  APR takes the loan interest rate and combines it with any additional loan-processing fees to give you a complete and accurate cost of borrowing. It's expressed as a percentage of the total size of your loan or outstanding debt.
  Zero-interest credit cards, or 0 percent intro APR credit cards, allow cardholders to make payments with no interest on purchases, balance transfers or both for a predetermined period of time. Since credit cards don't have loan-processing fees, a credit card APR is generally synonymous with the credit card interest rate.
• Business credit cards
  Business credit cards allow cardholders to keep their personal and business expenses separate while they earn rewards on all their business spending. Interestingly enough, business credit cards can also be cash back credit cards, general rewards credit cards, travel credit cards or even secured credit cards. You do need to have a business or income-producing activity to qualify for a business credit card.
  In general, the signs of a good business credit card are if it helps you benefit from your everyday spending and makes running your business easier. Some business credit cards will give you a flat rewards rate for all of your purchases, whereas other cards reward common business expenses like travel or internet service at higher rates.
• Secured credit cards
  A secured credit card is a credit card that is backed by a cash deposit, which serves as collateral should the cardholder default on payments. The deposit aside, secured credit cards function like any credit card. Consumers typically obtain secured credit cards to improve their credit scores or establish a credit history. Secured credit cards typically have lower credit limits and more fees than unsecured credit cards do.

Benefits Of Credit Card

• Convenience:
  A Credit Card is one of the simplest ways to pay for anything � no more counting out change or writing cheques, just present the plastic! You can even link your card to your digital wallet, which allows you to scan and pay without even having to carry your card in your wallet.
• Recurring payments:
  While Credit Cards are great for one-time payments, you can also set it up to automatically make recurring payments such as your phone, electricity or gas bills. No more will there be a chance of forgetting to pay bills on time and facing penalties or disconnection.
• Recharges and tickets:
  One of the biggest Credit Card benefits over cash is the ability to pay for a wider range of online services
• Interest-free credit:
  A Credit Card comes with a grace period between purchase and payment (could be up to 50 days) during which the bank does not charge any interest. This is a perfect example of buy now and pay later.
• Rewards:
  Every time you pay using an HDFC Bank Credit Card, you earn Rewards. You can redeem these rewards for exciting gifts and vouchers such as free shopping trips or even free flight tickets.
• Cashbacks and discounts:
  From fuel surcharge waivers to great online shopping deals, your Credit Card opens the doors to a host of Cashbacks offers and Reward Points, especially with selected offline and online merchants.
• Travel in style:
  Credit Card makes your travel a more pleasant experience with free access to exclusive airport lounges, priority check-in and boarding, extra luggage allowance, etc.
• Expense tracker:
  Credit Card statements are a great way to track your expenses every month since it provides you with an itemized account of your expenditure.
• Safer:
  One of the benefits of Credit Card in India is that it's much safer than carrying large amounts of cash around. If you lose the card, you can get a replacement after you notify your bank.
• Credit score:
  Organization's like CIBIL give credit scores to individuals depending on how prompt they have been in their payments. Using a Credit Card and repaying on time provides a boost to your credit score. A good credit score means you will be able to obtain Loans easily.

Eligibilty for Credit Cards

• Age:
  You must be at least 18 years old. However, some banks have a minimum requirement of 21 years.
• Annual salary:
  Your annual income determines if you're eligible for a particular card. The minimum salary required to apply for a credit card in India is around Rs.3 lakh p.a.
• Nationality or residential status:
  Citizens, residents, and non-residents can apply. However, there are a few cards that are only available for Indian citizens.

Documents required

• Completed application form
• Passport-size photographs
• Proof of identity (copy of PAN, Aadhaar, passport, etc.)
• Proof of residence (utility bills, Driving License, PAN, Aadhaar, etc.)
• Latest salary slips & bank statements

How Credit Cards Work

Credit cards can be used to make purchases online or in stores and pay bills. When you use a credit card for either one, your card details are sent to the merchant's bank. The bank then gets authorization from the credit card network to process the transaction. Your card issuer then has to verify your information and either approve or decline the transaction.
If the transaction is approved, the payment is made to the merchant and your card's available credit is reduced by the transaction amount. At the end of your billing cycle, your card issuer will send you a statement showing all the transactions for that month, your previous balance and new balance, your minimum payment due and your due date. The grace period is the period of time between the date of a purchase on your card and the due date listed on your statement. During this period if you pay your bill in full by the due date, no interest charges accrued.