Types Of Credit Cards In India Explained
A credit card is a bank-issued financial tool with a predetermined credit limit that allows you to conduct cashless transactions. The credit limit is set by the card issuer depending on the credit rating, credit history, and earnings.
When you receive your credit card bill, you can reimburse the sum you spent without interest within a specified repayment period. Interest is charged on your balance once the grace period has expired.
Due to the heterogeneous traits of human beings and their spending habits, credit cards are of different types as well. Let us discuss some of the major types of credit cards in India so you can get your categorical credit card comparison right:
- Travel Credit Card: A travel credit card works best for travel enthusiasts. It lets them have a pocket-friendly getaway with several complimentary benefits. Travel credit cards earn air miles and reward points that can be converted into travel-related benefits, on every purchase made with the card.
- Reward credit card: While making purchases in different categories, a reward credit card lets you win accelerated reward points in certain categories. Pick a reward credit card that benefits your current spending patterns and gives rewards that line with your goals to maximize the value of a reward credit card and earn the most cash points, or miles for your expenditure.
- Cashback Credit Card: A cashback credit card allows you to get a certain amount on your purchase back. It gives you rewards that can be converted into real money. Cashback credit cards are of three major types: flat rate, bonus cashback credit card, revolving cashback credit card.
- Premium Credit Card: Premium Credit Cards costs highly, some of them are even available for a very limited number of people only. Not everyone is eligible for a premium credit card. The reason behind their exclusivity and high cost are the luxurious and elite benefits it provides. Access to special airport lounges, worldwide travel insurance, concierge services, auto breakdown coverage, home emergency coverage, and a large rewards program are all common premium bonuses.
- Co-branded Credit Card: There are many travel brands, e-commerce brands, etc. that have collaborations with many credit card issuers in India. These collaborations have given birth to co-branded credit cards, like MakeMyTrip HDFC Credit Card, Flipkart Axis Bank credit card, etc. You get to enjoy exclusive benefits with partnered brands on making expenditures with the card.
- Lifestyle Credit Card: Lifestyle cards reward you for your lifestyle purchases while also assisting you in saving money with your purchase. You will receive exclusive and personalized discount offers from the card issuer's intermediaries. Unlike other credit cards, a lifestyle credit card gives reward points on even everyday purchases like grocery shopping.
- Shopping Credit Card: If you like to shop online or at a retail store, you can take advantage of a shopping credit card. It gives you reward points, shopping vouchers, coupons, cashback points, etc. while shopping which can help you save more.
- Fuel Credit Card: As the name suggests, a fuel credit card gives savings and rewards on expenditure made on gas and fuel. It gives benefits like fuel surcharge waiver, cashback points on fuel spending, etc.
- Business Credit Card: A business credit card is formulated to be utilized by a business rather than for private use. Business credit cards are obtainable to companies of all sizes, and they can assist them to establish a credit history that will help them get better borrowing circumstances in the future.
- Secured Credit Card: A Credit card that is backed up by a cash deposit as collateral for acquiring a card is known as a secured credit card. It is easily available for people with less credit scores as well. The money deposited as collateral makes up for the credit limit of the card.
Additional Reading - How To Control Your Credit Card Expenses
