How can a freelancer get a credit card? (India)
Typically Banks look for a steady source of income or savings based on which they issue a credit card. If you can't show that build a cash balance and show it. For Example if you have an PPF account with say SBI, they issue you a card with a limit of around 50% of the balance in PPF. No other documentation is required. Similarly if you have Fixed Deposits for a large amount quite a few Banks would give you a Credit Card. My wife has a credit card because she had a good balance [around 100,000 INR] for around a year, the Bank kept calling her and offered her a card. The OP might have obtained his credit card by now but I'm answering now as there is one more easy way to get a credit card. All major Indian banks like SBI, ICICI, HDFC and Axis issue instant credit cards on opening a FD (Fixed Deposit).  For instance ICICI offers one for FD amount of as less as ₹20000. The credit limit on such cards will be 85% of the deposit amount. Another advantage of these kind of cards is customer won't be charged any annual fees and at the same time interest will be paid on original FD. I don't know about India, but here in the US banks, and more friendly institutions such as credit unions, use to offer the option of a 'secured' credit card where the card was secured by placing a lock on money in a savings account equal to the credit limit on the card. So for example, if you had $1500 in savings, you could have them lock say $1000, which you would not be able to withdraw from savings, in return for a credit card account with a credit limit of $1000.  Typically you still earned interest on the full amount of the savings, you were just limited to having to maintain a minimum balance in that account of $1000.
"What you have is usually called a pre-paid credit card.  You pay some money (Indian Rupees) to the credit card company, and then you can use the card to pay for purchases etc in foreign (non-Indian) currencies upto the remaining balance on the card. If a proposed charge exceeds the remaining balance, the transaction will be declined when you try to use the card.  There might be multiple ways that the card is set up, e.g. it might be restricted to charge purchases denominated in US dollars alone, or you might be able to use it anywhere in the world (except India).  The balance on the card might be denominated in INR, or in US$, say. In the latter case, the exchange rate at which your INR payment was converted into the $US balance is fixed and agreed to at the time of the original payment: you paid INR 70K (say) and the balance was set to US$ 1000 even though the exchange rate on the open market would have given you a few more US dollars. In the former case with the balance denominated in INR, a charge of US$ 100, say, would be converted to INR at a fixed agreed-upon rate, or at the current exchange rate that the Visa or MasterCard network is using, plus (typically) a 3% fee currency exchange fee, and your balance in INR will decrease accordingly. With all that as prologue, if you made a purchase from Walmart USA and later returned it for a credit, it should increase your credit card balance  appropriately. You may be whacked with currency conversion fees along the way depending on how your card is set up, but with a US$-denominated card, a credit of US$100 should increase your card balance by US$100. So, that $US 100 can be spent on something else instead.  In short, the card is   your ""bank"" account. You cannot spend more than the remaining balance on the card just like you cannot withdraw more money from your bank account than you have in the account, and you can recharge your card by making more INR payments into it so as to increase the available balance. But it is like a current account in that you are unlikely to earn interest on the balance the way you do with a savings account. So what if you are back in India and have no further use of this card? Can you get your balance back as cash or deposit into your regular bank account? Call the Customer Help line, or read the card agreement you signed." "The weird thing is that if you use the credit impact simulators with the credit monitoring services, they show that the impact of paying your credit cards off completely is more negative than carrying a small balance, which doesn't make a great deal of sense, one would think.  From what I can gather, the rationale is that carrying a small balance shows you making payments over time, as opposed to having a zero balance.  This doesn't quite compute with me, but I don't truly understand the inner workings of the scoring models.  To confirm this, I used simulators with both TransUnion and Experian, and both showed this.  I know that it's easy to find people on both sides of this argument, so I can't say which is the best option (certainly whichever side someone falls on is the one they'll argue is the right one! chuckle). In all fairness, your best tool is time.  The effects of your prior bad decisions will lessen over time as they move further away in your history and then disappear altogether.  Obtaining a credit card just because you think you need one is not a compelling argument, by any means.  If you can't rationalize reasons why you need it then maybe you should question the wisdom of such a decision.  If you don't have a particular need for better credit right now, why be in a hurry to take on debt? Whatever the formulas are for calculating credit scores, the specific details are a pretty closely-guarded secret (they're proprietary for starters, plus it theoretically prevents people from ""gaming the system"" for a better score), but if you do enough research online, you can get a pretty good sense of how they work in general. Whatever you do with your credit should be in line with your overall financial goals.  If you want to remain debt-free (at least for now) then having a credit card you can't otherwise justify a need for just introduces temptations which could prove tough to resist (""wants"" quickly turn into ""needs"" when you can put it on a card you pay later), then you're right back in the same place you were earlier in your life. Instead of trying to figure out the ""best strategy"" for a credit card, first ask yourself how necessary it is to you right now in light of your financial objectives, then go from there. I hope this helps. Good luck!" Credit card fees on a credit card used for personal expenses are not tax deductible. Credit card fees on a business credit card are deductible on schedule C (or whatever form you're using to report business income and expenses). If you are using the same card for both business and personal ... well, for starters, this is a very bad idea, because it creates exactly the question you're asking. If that's what you're doing, stop, and get separate business and personal cards. If you have separate business and personal cards -- and use the business card only for legitimate business expenses -- then the answer is easy: You can claim a schedule C deduction for any service charges on the business card, and you cannot claim any deduction for any charges on the personal card. In general, though, if you have an expense that is partly business and partly personal, you are supposed to figure out what percentage is business, and that is deductible. In an admittedly brief search, I couldn't find anything specifically about credit cards, but I did find this similar idea on the IRS web site: Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part. For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules. (https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses) So, PROBABLY, you could add up all the charges you made on the card, figure out how much was for business and how much for personal, calculate the business percentage, and then deduct this percentage of the service fees. If the amount involved is not trivial, you might want to talk to an accountant or a lawyer. On my recent visit to the bank, I was told that money coming into the NRE account can only be foreign currency and for NRO accounts, the money can come in local currency but has to be a valid source of income (e.g. rent or investments in India). Yes this is correct as per FMEA regulation in India. Now if we use 3rd party remittances like Remitly or Transferwise etc, they usually covert the foreign currency into local currency like INR and then deposit it. The remittance services are better suited for transferring funds to Normal Savings accounts of your loved ones. Most remittance services would transfer funds using a domestic clearing network [NEFT] and hence the trace that funds originated outside of India is lost. There could be some generic remittance that may have direct tie-up with some banks to do direct transfers. How can we achieve this in either NRE/NRO accounts? If not, what are the other options ? You can do a Wire Transfer [SWIFT] from US to Indian NRE account. You can also use the remittance services [if available] from Banks where you hold NRE Account. For example RemittoIndia from HDFC for an NRE account in HDFC, or Money2India from ICICI for an NRE account in ICICI or QuickRemit from SBI etc. These would preserve the history that funds originated from outside India. Similarly you can also deposit a Foreign Currency Check into Indian Bank Account. The funds would take around month or so to get credited. All other funds can be deposited in NRO account. "The other option apart from the above which I feel is quite good is ""Travel Card"" [also called Forex Card] issued in USD. These cards are like prepaid debit cards. They are available from almost quite a few Indian Banks like HDFC / ICICI / UTI. The limit for students is around 100 K USD per year.  http://www.hdfcbank.com/personal/cards/prepaid_cards/forexplus_card/pre_forex_elg.htm The card can be reloaded by any amount [i think the minimum is USD 100] by visiting the Branch or certain Forex agents. There loading fee is INR 75. The Fx is typical Card Rate prevailing on the day. In US this card can be used as a credit card for almost everything [I have used this without any hassel]. Avoid using the card for blocking anything [at Hotel for room booking, or initial block at car rentals]. Although its mentioned that there is a withdrawl fees, i was never charged anything for withdrawls. The card comes with an internet based login to monitor account balance and transactions. Any unused funds can be withdrawn in India. The payment will be make in INR." Your chief problem seems to be that you're mixing Visa (credit cards) and Step2 (a European Automated Clearing House). Credit cards are primarily an American concept, but do work worldwide especially in travel&tourism industry. The Credit Card companies are financial institutions themselves and operate similar to international banks They're typically acting as intermediaries between the customer's bank and the retailer's bank, so this works even if those two banks have no existing agreements.  This is expensive, though. Step2 is a cheaper European system which eliminates the middle man. It allows the consumer's bank to directly pay the retailer's bank. VISA is not a member of Step2. 1) Every credit card company charges vendors a fee. That's sufficient to make an acceptable profit per charge even if some of that money goes into marketing expenses -- and the cash-back offer is a marketing expense. 2) Many if not most consumers pay interest; probably everyone does so occasionally when we get distracted and miss a payment. 3) The offer encourages you to put more payments on the card -- and in particular on their card -- than you might otherwise. See #1; that increases net income. Depends on your credit score. If you came from foreign country, you might not be having enough Credit Score.  In that case, you have to go for Prepaid Credit Card offered by Banks. For prepaid credit card,you have to deposit certain amount of money which will act as your credit line.