Credit Card Glossary
Every credit card term, explained in plain English. No jargon, no fine print — just clear definitions relevant to Indian cardholders. Bookmark this page as your go-to reference when you encounter unfamiliar terms on your credit card statement or application form.
- Annual Fee
- A yearly charge levied by the bank to maintain your credit card account. Ranges from ₹0 (lifetime free cards) to ₹12,500+ for premium cards like HDFC Infinia. Many banks waive the fee if you meet a minimum annual spend threshold — e.g., HDFC Regalia Gold waives ₹2,500 on ₹3 lakh annual spend.
- APR (Annual Percentage Rate)
- The annualised interest rate charged on your outstanding balance if you don't pay in full by the due date. In India, credit card APR typically ranges from 30% to 42% per year (2.5–3.5% per month). RBI mandates that the APR be clearly disclosed on your monthly statement. This is one of the highest interest rates across any lending product, which is why paying your full balance every month is critical.
- Billing Cycle
- The period (usually 30 days) between two consecutive statement generation dates. All transactions within this period appear on a single statement. Your due date falls 15–20 days after the statement date, giving you up to 50 days of interest-free credit on purchases made at the start of a cycle.
- CIBIL Score
- Your credit score as maintained by TransUnion CIBIL, India's largest credit bureau. Ranges from 300 to 900; a score of 750+ is considered good and significantly improves your chances of being approved for premium credit cards with higher limits and better rewards. Your score is influenced by payment history, credit utilisation, length of credit history, and number of recent inquiries.
- Credit Utilisation Ratio
- The percentage of your total credit limit that you're currently using. For example, if your card has a ₹5 lakh limit and you have ₹1 lakh outstanding, your utilisation is 20%. Keeping this below 30% is recommended for a healthy CIBIL score. High utilisation signals higher risk to lenders.
- Forex Markup
- A fee charged on international transactions, typically 1.5% to 3.5% of the transaction value, plus 18% GST on the markup. Zero-forex or low-forex cards like IDFC First Wealth and Axis Atlas reduce this cost significantly, making them ideal for frequent international travellers and overseas online shoppers.
- Minimum Amount Due (MAD)
- The smallest amount you must pay by the due date to keep your account in good standing — usually 5% of the outstanding balance or ₹200, whichever is higher. Paying only the MAD avoids late fees but triggers interest on the entire outstanding balance from the transaction date. Always pay the full balance to avoid the interest trap.
- Milestone Benefit
- A bonus reward (extra points, voucher, or fee waiver) triggered when you reach a specific spend amount within a defined period — e.g., spend ₹3 lakh per year with Axis Atlas to receive bonus Edge Reward points worth thousands.
- Priority Pass
- A global lounge access programme included with many premium Indian credit cards. Allows you to access 1,500+ airport lounges worldwide. Cards like HDFC Infinia and Diners Club Black offer unlimited Priority Pass visits, while mid-range cards typically cap visits at 4–8 per quarter.
- Reward Rate
- The effective percentage of your spend you receive back as rewards. Calculated as: (reward points earned × value per point) / spend amount. A card earning 2 points per ₹100 at ₹0.50 per point has a 1% reward rate. Premium travel cards can deliver 3–5% effective reward rates on travel spending through portal multipliers and transfer bonuses.
- TCS (Tax Collected at Source)
- Under LRS rules, international credit card spends above ₹7 lakh per financial year attract 20% TCS. This amount is refundable when filing your income tax return but impacts cash flow. Track your international spending across all cards to avoid surprises.