A credit card is generally regarded as a substitute for cheque or cash. Credit card has an unsecured line of revolving credit and the borrower is required to pay at least part of card outstanding in each statement cycle. As the outstanding decreases the available limit is increased. A credit card is always issued with a pre set limit, which is determined by financial history and the income source of the applicant and also complying with the rules and regulations set by NRB. In case of cash advance, the limit is generally assigned 50% of the total limit including cash advance fee. For granting line of credit, banks levy different fees like issuance, over limit charges as well as interest on the outstanding borrowings.

Advantages of using a credit card

a. Convenience in payment for goods and services

b. Easy availability of credit facility

c. Cash advance facility in case of emergencies

d. Free credit period upto 45 days

e. Secured, no risk of carrying cash or stealing of cash by someone

f. Discounts and bonus at selected merchant establishments can be availed

g. Wide acceptability at merchant outlets

h. Add on card facility to family members


Disadvantages to credit card holders

a. Often results in over spending

b. Frauds, due to a loss of card in the intervening periods


Credit card services in Nepal were first introduced by NABIL bank in early 1990s. As on mid july 2018, there are 104721 credit card customers in Nepalese banking industry.