Personal Finance for Millennials: Understanding Credit Cards

We have to give it to millennials because they are a force to be reckoned with by growing with the startups, diving into the gig economy and embracing the markets. At 440 million, millennials make up about 34% of India’s population and 46% of the workforce. On our way to adulthood, we have experienced two global crises: a recession and a pandemic. And while most of us know the formula for smarter spending—optimizing more money coming in, money going out—life often complicates that recipe. Occasionally we are marred by universal, eternal problems, such as lack of budgeting, undisciplined habits, and failure to save and invest. That’s why more and more millennials are adding an essential tool to their spending planning: credit. Indians used credit cards to spend more on food, groceries, shopping and paying utility bills in 2020, and spending on travel and entertainment plummeted, according to data from credit card payment company CRED. It scanned spending of 1 million members in India’s major cities.
1 Shopping, including clothing and electronics, and food, including groceries and ordering from eateries, saw the highest credit card spending year-round, accounting for 36% of total such spending in 2020, a behavior driven by curbs. According to a survey conducted by ET RICS (Research, Insights & Consumer Survey), more than half of mobile phone users in urban India plan to switch mobile devices in the next six months. Nearly 65% ​​of these are millennials.


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These habits have resulted in the credit card market buzzing with valuable and rewarding offerings for many consumers and lifestyles. Statista, a statistical portal for market data, revealed that India recorded a whopping 125 million credit card sales transactions in June 2020.

Unwilling people should know that not all debt is bad. Just as the average wage earner can’t buy a house without a loan or a middle-class student can’t afford an expensive college education without a student loan, it would be difficult to meet our financial goals without a healthy mix of planned debt. But, of course, you can end up in poor financial health if you expose yourself too much to unplanned debt. Here’s how a credit card can ease your financial needs:

A little extra support that goes a long way


Suppose you are in a medical emergency and need cash immediately. Would you instead break that FD or tap your credit card and convert the bill into an EMI for a smoother refund? Yes, the latter is the wisest option because it acts as a short-term loan that can be repaid in whole or in part later. However, choose your emergencies wisely and don’t go overboard by paying an amount that you may not have the money to pay back.

Go cashless and stress less


A stress-free lifestyle is so underestimated. The cashless option can help you achieve this effectively – bring a debit or credit card, or perhaps pay through a digital wallet. Credit cards have a huge advantage over other cashless and contactless payment options here, as they limit your chances of becoming a victim of theft. If you notify your card provider of fraudulent transactions in good time, you can get your money back and have your card blocked immediately.

You pay, but you also earn


Who doesn’t love rewards and cashback? Credit cards offer great discounts, reward points and cashback for every rupee you spend, and you can use these points to shop later. In a way, this creates a cycle of saving and balancing your spending. These points can be exchanged for movie vouchers, dinners, electrical appliances or even airline tickets. Just pick a card with a rewards program depending on your spending or preference and save big. For example, go for a card with Air Miles points if you’re a frequent flyer or a card that gives cashback at gas stations if you like to drive around. Plus, every time you pay your credit card bills through CRED, you’ll receive CRED Coins. you can use these to win exclusive rewards or get special access to curated products and experiences. on CRED, good begets good.

Shop now, pay later


It’s not a good feeling to have said no to going out with friends or buying your nephew that soccer jersey just because it’s the end of the month. Credit cards allow you to exceed your budget so you won’t regret. However, control is the keyword here. While you can use the full credit line to take that dream vacation, it won’t be smart. Plan well and view convenient EMI options and then take advantage of your credit card.

In addition to a slew of offers, credit cards come with several layers of security, minimizing the risk of losing money on an online purchase or during a transaction. In addition, the CRED Store allows you to shop for a selection of hand-picked curated products and travel experiences from luxury destinations across India and the world at exclusive member prices. The app has over 1,800+ brands, with 500+ active at any time.

Becoming creditworthy and fulfilling those ambitions


Have you heard of the term “credit score”? It’s like a report of your financial health and shows how good you are with money. Your credit score determines how creditworthy you are. And being creditworthy makes applying for a loan easy. It is based on several factors such as repayment history, loan types, length of credit history, and a person’s total debt. To build a good credit score and ensure solid financial health, you must have a credit card. When and if you apply for a loan, the lending bank or organization will check your credit score to assess whether you can repay the loan quickly or not. When you pay your credit card bills on time, you demonstrate positive financial behavior that makes you a worthy borrower in the eyes of credit bureaus. Therefore, it is advisable to pay your credit card bills in full and on time.

Become financially responsible


When you think about the long-term benefits of owning a credit card, one of the best benefits is that it keeps you on your toes in financial planning. You can use the monthly statements to keep track of your expenses and feel a sense of power. Staying focused and aligned with your money and life goals can lead to increased self-esteem, especially in younger people. It also teaches you to take control of your financial expenses from an early age and not give in to immediate temptations. The key is to stay ahead of the curve by making sure you only use credit cards for planned purchases and regular spending.

In addition, some credit cards offer additional benefits that you may not be aware of, including purchase protection, no liability for fraud, guaranteed returns, car rental coverage, and more.

What if we told you that you could even be rewarded for paying your credit card bills on time to add to all of these benefits? Well, it’s true! Stay ahead of the competition with CRED – a members-only platform that rewards creditworthy individuals with exclusive experiences, rewards and upgrades. With CRED you can avoid being surprised by your financial planning and keep a constant eye on your credit score. It also helps you maintain a good credit score, which in turn boosts your credit, making it easier for you to get approved for a new credit card or mortgage to live the lifestyle of your dreams.

Here are two simple habits developed with CRED that can help you keep your credit score in check:

Pay credit card bills fast

CRED helps you pay your credit card bills on time to maintain your credit score. If you have enough money, you will pay your bills in full, but if you run into financial difficulties, you should at least try to pay the minimum amount on your card to avoid extra charges.

Check your credit report regularly

CRED members can check and renew their credit score with one click at no additional cost. You can also order a free copy of your credit report from the various credit bureaus once a year. Maintaining a good credit score as a young adult will only benefit you by ensuring a secure future.

Always remember that when using a credit card you should give importance to what you ‘need’ over what you ‘want’. And now that you know the reasons that make up a holistic view of the importance of owning credit cards as a millennial, become a CRED member to better manage your credit card and be rewarded for it.

Check your credit score for free with CRED’s Credit Score Calculator.


Disclaimer: This article was commissioned by the Times Internet Spotlight team for CRED.

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