For many non-resident Indians (NRIs), credit cards issued in their country of residence are often the primary payment tool. These cards offer rewards, travel benefits, and seamless spending abroad.
Yet, when it comes to expenses in India, whether paying utility bills, managing family spending, booking domestic travel, or maintaining a credit profile for future borrowing, an Indian credit card can play a surprisingly important role.
Experts say Indian credit cards can help NRIs build a credit history in India, simplify rupee-denominated spending, and support future borrowing needs. However, they also come with considerations around forex charges, repayments, FEMA (Foreign Exchange Management Act) compliance and taxation that users should understand before applying.
Can NRIs get an Indian credit card without a fixed deposit?
Until a few years ago, fixed deposit-backed credit cards were often the default option available for many NRIs. That is gradually changing.
“Eligible NRIs can now obtain unsecured Indian credit cards from several banks without pledging a fixed deposit. Approval, however, is typically linked to factors, such as income, banking relationship, documentation, and the bank’s internal credit assessment,” says Adhil Shetty, CEO, BankBazaar.
That said, fixed deposit-backed cards continue to be an accessible route for many applicants, particularly those who do not have an established banking relationship in India or sufficient income documentation.
For NRIs who already maintain NRE (non-resident external) or NRO (non-resident ordinary) accounts, approaching the same bank for a credit card may improve the chances of approval, as existing relationships can simplify verification and onboarding.
How an Indian credit card can help maintain your CIBIL score
One of the most overlooked benefits of holding an Indian credit card is its impact on your credit history in India.
Many NRIs assume that a strong credit score in the US or another country will automatically help them secure loans in India. Unfortunately, that is not how the system works.
Indian lenders rely primarily on Indian credit bureau data when assessing borrowers, points out Raj P. Narayanam, Executive Chairman, Zaggle.
“A CIBIL score is built on Indian credit behaviour, reported by Indian lenders to Indian bureaus. An NRI’s impeccable US credit history means nothing to a bank in Mumbai evaluating a home loan application,” he says.
This can become particularly important for NRIs who plan to buy property in India, take a loan against property, finance a business venture, or eventually return to India.
“If an NRI holds an active Indian credit card, uses it regularly, even for small recurring transactions like OTT subscriptions or utility payments, and pays the bill on time every month, they are systematically building a credit footprint in India that will serve them when it matters most,” says Narayanam.
The difference between a CIBIL score of 650 and 780 can directly influence interest rates, loan eligibility, and negotiating power with lenders, he adds.
For many NRIs, keeping one active Indian credit card may be one of the simplest ways to ensure their Indian credit history does not become dormant.
Charges and features NRIs must check before getting an Indian credit card
Credit card marketing often highlights airport lounge access, reward points, and welcome bonuses.
But experts suggest looking beyond the promotional material.
The single most important feature for frequent India-US travellers is often the one that receives the least attention: forex mark-up, according to Narayanam.
Most Indian credit cards charge between 1.5% and 3.5% on international transactions. For someone spending Rs 10-15 lakh annually across currencies, these charges can quietly erode a substantial amount of money.
“A low or zero forex markup card should be the non-negotiable baseline before evaluating anything else,” he says.
Once forex costs are addressed, travellers should evaluate travel insurance benefits, including coverage for medical emergencies, trip cancellations, and lost baggage. Airport lounge access can also be valuable, particularly for frequent flyers moving between India and the US.
Another commonly misunderstood feature is Dynamic Currency Conversion (DCC).
This occurs when a merchant abroad offers to charge your card in Indian rupees instead of the local currency. While it may appear convenient, the exchange rate used is often less favourable than the card’s network rate.
“When an overseas merchant offers to bill a transaction in rupees instead of the local currency, the exchange rate applied is often less favourable, making the transaction more expensive,” says Shetty.
Experts generally advise declining DCC and choosing to pay in the local currency instead.
International ATM withdrawals can also prove expensive because they usually attract cash advance fees and interest from the date of withdrawal.
Annual fee waiver conditions, spending, thresholds and reward point expiry policies are other areas that deserve careful scrutiny before selecting a card.
Reward points should be assessed based on their actual redemption value rather than headline earn rates, cautions Narayanam.
“The most underrated feature of all is customer service quality across time zones,” he adds. “An NRI whose card is blocked at midnight in New York needs resolution in minutes, not business hours.”
How do Indian credit card repayments work for NRIs?
Repayment is another area where practical considerations matter.
“Most banks allow NRIs to repay their Indian credit card dues through linked NRE or NRO accounts, subject to the bank's processes and account arrangements. Many issuers also provide auto-debit facilities, which can help reduce the risk of missed payments and late-payment charges,” says Shetty.
However, NRIs should not underestimate the role of exchange-rate movements and remittance timelines.
If funds are being transferred from overseas before a bill payment is made, processing delays and banking cut-off times can affect when the money becomes available.
“For example, if a cardholder needs to pay a bill of Rs 1 lakh, the amount of foreign currency required to fund that payment will vary depending on the prevailing exchange rate,” he says.
Maintaining adequate balances in linked NRE or NRO accounts and initiating transfers well before the due date can help avoid last-minute complications.
FEMA, KYC, and compliance issues NRIs should know
This is perhaps one of the least understood aspects of using Indian financial products while living abroad.
According to Narayanam, many NRIs continue operating resident savings accounts and credit cards even after becoming non-residents under FEMA rules.
Once an individual becomes an NRI, resident savings accounts are generally required to be converted into NRE or NRO accounts. Credit card arrangements linked to those accounts should also be reviewed.
“Many NRIs continue using resident accounts and cards without converting; this creates a compliance gap that can surface during home loan KYC, tax assessments, or repatriation of funds,” he says.
NRIs should therefore inform their bank of any change in residential status and ensure that account classifications and credit card records are updated accordingly.
Those living in the United States should also be aware of overseas reporting obligations such as FBAR and FATCA, where applicable.
For NRIs and H-1B professionals, an Indian credit card is no longer just a convenience for occasional spending back home.
It can help maintain an Indian credit history, simplify family-related expenses, support future borrowing plans, and integrate more smoothly with India's payment ecosystem.
However, choosing the right card requires looking beyond welcome bonuses and reward points. Forex markup charges, repayment logistics, FEMA compliance requirements, and actual redemption value can have a much greater impact on long-term value.
