Why do banks repeatedly offer you credit cards?
people in india are getting credit cards in their name in large numbers. people are also spending a lot by borrowing on credit cards. Now the question arises that why does the bank issue credit cards on its own? Actually, credit card is a big source of income for the bank. This not only increases the number of customers but also encourages them to spend more and more.
Keep this in mind while using credit card
While using credit card, you should keep checking the credit utilization ratio. That is, how much of the credit card limit do you use in a month. This has a big impact on the credit score. For a good credit score, it is advisable to keep the credit utilization ratio low or less than 30 percent.
Banks get profit from credit card
Banks bet big on credit cards and offer it to you as much as possible. This is because banks earn profit from credit cards in the form of interest rate, annual charge, re-issuing charge, merchant fee. Apart from this, interest is charged on the outstanding amount if the credit card bill is not paid on time. Sometimes late payment fee is also added with interest. The bank also earns profit in the form of interchange fee on every transaction. Credit card business is flourishing rapidly in India. In january 2025, the expense through credit card has increased by 10.8 percent year-on-year to Rs 1.84 lakh crore.
bank offers on credit card
Banks entice customers through many benefits like reward scheme, cashback, discount on air travel, free lounge access. Many times people also use credit card to build credit history or manage credit score so that they do not have any problem in taking loan in future.
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