Credit Cards

Top Free Credit Cards In India 2015 6 things to know before you apply for a credit card in india
Written by CreditSmart

These Cards Offer Great Perks with No Annual Fees. Will You Be Approved?

Is a free credit card better than the one with an annual fee?

The answer is both yes and no.

Yes, it is better for those who do not use credit cards extensively. Those who mostly pay through credit cards, on the other hand, should go for the paid ones because they offer better benefits.

So it all boils down to choice. You choose the one which spells a better deal for you. If you don’t use your card too frequently, you are not going to accumulate a lot of benefits even with a paid card that offers the most attractive goodies, so why not save on the annual fee by picking a free credit card?

Read on to know the top free credit cards in India and how you should evaluate this bunch to pick the best among the equals.

But first let’s learn the answer to a question that puzzles many: why do bank offer free cards in the first place?

Well, actually there are no free credit cards (much like there’s no free lunch). Yes, the bank doesn’t charge a joining and annual fee and doesn’t charge an interest if you clear payments on time, but that doesn’t mean it earns nothing through your card.

Banks charge a percentage of retailer’s margin, 2 %, every time you use your card. And that’s how it earns money from credit cards, free as well as paid ones.

Top four no-annual fee credit cards

Surprising as it is, many top Indian banks don’t offer a free credit card. This list includes names like ICICI Bank, SBI, Axis Bank, and HDFC Bank.

Now to the good news, these are the 4 best free credit cards:

  • Citibank Platinum
  • Standard Chartered Inner Circle Platinum
  • PNB Gold/Classic
  • Kotak Easyday Silver

Choose the best among equals

Even if you are picking a free card, why not choose the one that has the best terms?

The most important things to look in free credit cards are:

  • Maximum Interest Free Period

Some banks give users more time to pay the bill than others. More generous ones offer up to 24 days while the least generous banks give only 17 days. The average time period is 3 weeks.

  • Interest Rate

If you always clear bills on time, this shouldn’t bother you. Habitual or occasional late payers, on the other hand, would appreciate a lower interest rate.

  • Late Payment Charge

Again, this won’t be much of a concern for astute card holders. Late payers, however, would prefer a less severe monetary punishment for their financial indiscipline.

  • Rewards

You won’t find free credit cards offering the most attractive rewards (there’s only so much you can get free!). Nevertheless, most do offer reward points. Picking the one with the best reward features can be advantageous for some.

  • Other Charges

Other charges that you should consider include cheque bounce charge, card replacement charge, and handling charge for the cash payment.

Comparison Chart

PNB Gold/Classic Kotak Easyday Silver Standard Chartered Inner Circle Platinum Citibank Platinum
Max. Interest Free Period 50 days 48 days 48-55 47-53
Interest Rate 2.45% 3.4% 3.1% – 3.49% 3.25% – 3.50%
Rewards Earning (on ever INR 100) 50 paise 10 paise 50 paise 40 paise
Late Payment Fee 200-500 100-700 100-700 300-700
Cheque/ECS bounce 100 500 500 300
New Card 100 100 250 100
Cash Deposit NA NA NA 100

As you can see different cards score high on different points. For instance, the Inner Circle Platinum is a good option for someone for whom the grace period is the most important factor. On the other hand PNB’s card makes for a great choice for those who want low interest rate more than anything else.

To pick the best card, you must first understand the criteria most important to you. Once you know that, refer the above chart and make a selection.

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