If someone finds themselves short on cash or doesn’t have enough in their account to cover a bill, they can now use a credit card to handle those expenses. The number of people using credit cards has really shot up over the years.
As of 2023, there are over 10 crore credit cards in India. In 2022, around 1.22 crore new cards were issued, and that number jumped to 1.67 crore in 2023.
Every month, a bill comes out after using the credit card. If you miss the payment deadline, it can hurt your CIBIL score, which might make it tougher to get a loan later on. However, not paying on time doesn’t impact your CIBIL score directly.
To maintain a healthy CIBIL score, it’s important to use your credit card wisely. Avoid maxing out your credit limit; for instance, if your limit is Rs 100,000, aim to spend only Rs 20,000 to Rs 30,000.
High credit utilization can signal that you’re overly reliant on your credit card, which can negatively impact your CIBIL score.
Remember, a CIBIL score below 700 is considered poor, making it challenging to obtain new credit cards or loans. Therefore, it’s crucial to keep an eye on your credit utilization ratio.