I want to list the two best credit cards that I am using currently. Before I tell you that, you should know about MDR or the Merchant Discount Rate.
Significance of MDR?
MDR is the amount charged by the Bank or Card Issuer to the Merchant for accepting the card. This is typically in the range of 1-3%.
for e.g. if you buy an item for 100/- then the merchant will get 97/- and the rest 3/- goes to your Bank or Card Issuer. Now from the 3/- the bank will pay 1/- to MasterCard/VISA and maybe give 1/- to you as rewards and keep the remaining 1/- with the bank itself.
One important thing to note here is that no Card Issuer irrespective of what they say can’t give you returns more than 1-2% as cash back or points. So you must not fall into the trap if an agent comes to you and says 10% rewards or so. All of these are not possible. Some new issuer might pay you more but that will be from the card issuers pocket when they are trying to sell a new card and this will be gone once they have enough customers. This is not profitable in long term and would be withdrawn soon.
The best Credit Card is always the one that pays the maximum cashback on your purchases and has the lowest charges. So I’ll explain the features of the two best Credit Cards I personally use.
Remember: This article is written with the assumption that you always pay credit card bills on time and there are no arrears or EMIs.
Amazon ICICI Credit Card
This is my favourite credit card. You need to have an Amazon prime account to earn max rewards. That costs 999/- a year currently.
- There are no charges on credit card as such and it is lifetime free.
- Being a Prime member gives you 5% cashback on purchases on Amazon purchases.
- Any payment made using Amazon pay gives you a flat 2% cashback.
- All non-Amazon transactions gives you 1% cashback. i.e. when you pay on any other website or swiping at shops.
- Cashback is received as soon as bill is generated as Amazon pay balance.
Refer: Amazon ICICI Website
Flipkart Axis Credit Card
This is my second favourite credit card.
- 500/- is joining fee and 500/- charged for renewals. Its returned back when you spend more than 2lakhs in a year. If you are paying joining fee you get vouchers worth that amount. Normally its free when you apply from Flipkart app
- You get 5% cashback on purchases on Flipkart, Myntra, 2Gud.
- 4% cashback at preferred merchants but this list keeps changing.
- All other transactions gives you 1.5% cashback.
- Cashback is adjusted in next months bill amount.
Refer: Flipkart Axis Card Website
The best part about both these credit cards is that they give cashback as proper cashback every month and not reward points. There is no reward redemption fee and other nonsense. This is processed automatically every month without any user intervention.
Is the credit card worth it?
I would say it’s a must-have if you shop on Amazon, Flipkart or Myntra. You get 5/- for every 100. You get 2/- per 100/- you spent on every mobile or broadband recharges or insurance payments.
If you think that taking Credit Card is a loss then just check out the article Loss on Credit Cards you didn’t use