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Most people these days have multiple credit cards, and it’s quite natural to get mixed up with the bill payment deadlines, which can lead you to a debt trap before you realise it. Cred, a mobile platform for credit card bill payment, nudges to not only pay all your bills on time but also rewards you for doing so.

Cred awards you ‘Cred coins’, which you can redeem against offers and discounts from various brands. Cred coins don’t have a specific value, and what you get varies according to the offer. “Cred keeps all your cards on the same platform, and offers you rewards for paying your bill on time," said Cred founder and CEO Kunal Shah, who founded Freecharge earlier. But is it worth it?

What you get

When you join, the app rewards you Cred coins equal to your credit score. After that, each time you pay a credit card bill on time, Cred coins equivalent to your bill amount get added. There are various offers you can avail of using the Cred coins. For instance, 20,000 Cred coins can get you a UrbanClap gift card worth ₹500. The offers are from various brands, including Zomato, FreshMenu and Airbnb.

“Apps like Cred are good for ensuring no payments are missed, and for getting some extra rewards. But I know enough people who let them expire," said Shweta Jain, founder and CEO, Investography, a financial planning firm.

Like any discount or reward system, this too is designed to hook you as a customer. If you start using Zomato Gold because you got a free membership, there is a good chance you will pay to subscribe when the offer is over.

How it works

If you have a credit score above 750, you can apply for Cred membership. You have to download the app and register with your name and mobile number. Using the information, Cred can access your credit score through tie-ups with credit bureaus Experian and CRIF.

It displays all your credit cards linked to your phone number and asks you to verify them. Once you have added your cards, you can manage all your bill payments using the app. If you allow the app to access your email account, it will also analyse your credit card statements and find any hidden charges and fees. It can also help you budget by categorising your spends under heads like travel, food and medical bills. You can also view your payment history and get a summary of your spends.

The app lists all your cards, outstanding bills, minimum payments and deadlines. But is it useful? “Someone with a high credit score is probably already good at managing bill payments, so why would they need an app for it? As for the rewards, we get plenty of reward points from other sources as well," said Deepali Sen, founder partner of Srujan Financial Advisers LLP.

Not for everyone

The fact that the app is available only to those with a credit score of 750 and above automatically excludes those who have defaulted on a loan or a credit card bill, and even those who have never taken a loan or used a credit card. The app takes up to 48 hours to process payments, so if you pay your bill too close to the deadline, you may end up missing it.

Another concern is data security, given that the app can have full access to your Gmail account, but Cred says it does not access any other email or information except those related to the cards you manage on the app. “To give access to your credit history, emails, etc. is a lot of information to share, and there could be privacy concerns," said Jain. So see the pros and cons before you sign up.