Anubhav Tyagi

September 11, 2022

Personal Finance / Credit Cards

Credit Card market has exploded in India in last few years. Most spends are moving to digital methods as merchants are getting POS terminals and setting up payment gateways. This is good for the ecosystem as consumers get to pay via credit (vs cash), and merchants get to build a sale register basis which they can get cash advances from their banks. 

What's important to realise here is that Credit Cards need to be thought of as Postpaid Wallets that let you checkout instantly and securely (vs cash in account), and not as Line of Credit where you can pay back the card provider over months. Credit Cards are good for the 30-45 interest free days and terrible once their interest counter begins. 

We're already talking about credit over UPI and card tokens on phones. Over time , we'd forget about the plastic form factor, and think of it as a relic of the analog era. Lots of app-based stores have integrated their co-branded cards within their apps. I expect such cards to get even more deeply embedded in checkout habits, increasing the convenience for users. 

There are lots of sites reviewing the cards individually but no one talks about portolios and a system of cards. I think I've built a good system for using credit cards that I'm sharing in this post. One can replace any card in this system with another card that's better suited to them depending on what cards they already hold or can get.

I tried optimising the credit card usage but have simplified my approach. Disha doesn't bother about rewards and wouldn't agree for anything more than this, so this is a simple approach that works well enough for couples -

  • I've got an HDFC Infinia, with add-on card for Disha, for shared expenses. I pay the bill from our joint account that we fund in equal measure each month.
  • Disha puts her personal expenses on her Axis Vistara, and she pays the bill from her account. 
  • I put my personal expenses on my SBI Vistara and I pay the bill from my account.

Between these 3 card providers, we're able to leverage card-provider discounts during Diwali sales if it's worth breaking the default cateogory rules and immediately settle that bill by funding the appropriate account.

The next possible level to this method is not having a single joint card, where most of the spends are, but rather a bunch of them, say 1 for travel, another for food, another for shopping. These category based cards help in tracking spends per category, and co-branded cards shine here as they give higher rewards for their categories. I've got a few of these already in hopes that Disha will appreciate a more complex L2 setup by next year organically 😅

Some good ones for these category based spends are -
  • Axis Atlas for International Flights
  • Kotak Indigo for Indigo Flights
  • ICICI Amazon for Amazon
  • Axis Flipkart for Flipkart
  • RBL Zomato for Zomato

I've realised over time that I value a clean accounting system as much as I value rewards. So, this system helps in tracking spends per category without giving up on rewards. This way, I don't have to rely on the categorisation done by card providers. The rewards payback for the card fee and then some, which is good enough. The most effective way to get some returns on expenses is to cut down on luxury spends 😉


About Anubhav Tyagi

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