Credit card terms explained
Short answer
The terms that decide what an Indian credit card actually pays you are rarely on the marketing page: the monthly cap on an accelerated category, the merchant category code that routes a transaction, the surcharge on rent and high utility spend, the exclusions that keep spend out of the fee-waiver threshold, and the forex markup plus GST on overseas transactions. Each definition below is written to stand on its own, with a link to where the concept is applied to real cards.
Source: CardMasters issuer-evidence catalogue, release 2026-08-04. Confirm final terms with the issuer.
- Forex markup
- A percentage an Indian issuer adds to every foreign-currency transaction, on top of the exchange rate. Typical Indian cards charge 3.5%, low-forex cards 0.99%–2%, and GST applies on the markup itself. On ₹1,00,000 of overseas spend, the difference between 3.5% and 0.99% is roughly ₹2,500 before tax.
Cards ranked on international spend → - MITC (Most Important Terms and Conditions)
- The RBI-mandated document in which an Indian card issuer must disclose fees, interest rates, billing cycle, default charges and withdrawal terms in a standard format. It is the authoritative source for a card's real terms — marketing pages routinely omit caps and exclusions that appear in the MITC.
How CardMasters records issuer terms → - Billing cycle and grace period
- The billing cycle is the period whose transactions appear on one statement, usually about 30 days. The grace period is the interest-free window between the statement date and the due date, typically 15–20 days, and it applies only if the previous balance was paid in full. Carrying any balance normally removes the grace period on new purchases.
Compare cards in the directory → - MCC (Merchant Category Code)
- A four-digit code the payment network assigns to a merchant, which decides whether a transaction earns accelerated rewards, base rewards or nothing. It is why a purchase that feels like groceries can earn at the department-store rate, and why merchant-specific offers cannot be inferred from a broad category.
Check what a category actually earns → - Reward rate vs value back
- The reward rate is how many points or how much cashback a card grants per rupee spent. Value back is what those rewards are worth after redemption — points redeemed for statement credit are usually worth far less than the same points transferred to an airline programme. Comparing cards on reward rate alone overstates points cards and understates cashback cards.
How points are valued here → - Monthly cap
- A ceiling on how much accelerated reward a card pays in a category each statement month. A 5% rate capped at ₹500 a month pays 5% only on the first ₹10,000 of that spend and effectively nothing beyond it, so the cap — not the rate — decides value for anyone spending above the threshold.
See where the cap binds for your spend → - Annual fee waiver
- A condition under which the issuer refunds or does not levy the renewal fee, almost always a minimum eligible annual spend. Excluded categories — commonly rent, fuel, wallet loads and government payments — usually do not count towards the threshold, so the qualifying spend is lower than total spend.
Low annual fee cards → - Surcharge (fuel, rent, utility)
- A fee added to certain transaction types. Indian issuers commonly levy 1% on rent payments and on utility spend above a monthly threshold, while fuel attracts a 1% surcharge that many cards waive within limits. A surcharge can exceed the reward earned, making the transaction net-negative on that card.
Cards ranked on utility bills → - Devaluation
- Any change that reduces what a card earns or what its rewards are worth: a cut reward rate, a new monthly cap, a category moved to the exclusion list, or a narrowed redemption route. Indian issuers usually implement these through a terms update rather than an announcement.
Every recorded change, dated → - Hard enquiry
- A credit-bureau check recorded when you apply for credit, visible to other lenders and typically retained for two years. Three or more within a 90-day window is a common auto-decline trigger at Indian issuers, which is why applying to several cards at once reduces rather than improves your chances.
Check eligibility without an enquiry → - Credit utilisation ratio
- The share of your total credit limit currently in use. Indian scoring models generally treat sustained utilisation above roughly 30% as a risk signal, and the figure reported is usually the statement balance — so paying in full after the statement date can still register as high utilisation.
What issuers publish as criteria → - Lifetime free (LTF)
- A card with no joining fee and no renewal fee for as long as it is held. It is distinct from a first-year-free offer or a spend-conditional waiver, both of which are frequently marketed in similar language. Only the issuer's written terms settle which one a card actually is.
Cards with no recorded annual fee →