Types Of Credit Cards: Expectations vs. Reality

The market for credit cards has expanded tremendously over the years, and there are now numerous varieties available in India. Although the basic purpose of each category of credit card is the same, each card type has its own special features and advantages. Understanding the various credit card kinds available in India will help you make an informed decision if you're looking to add a new credit card to your financial portfolio. Examine the choices you have and what each one entails.

Basic credit cards

Simple, beginner-friendly basic credit cards provide you with a low credit limit based on your income. The basic card allows you to spend up to the available limit on purchases and other transactions. These straightforward credit cards often don't provide any extra perks or rewards. They work well for individuals who want to test out using a credit card for a few months before attempting to build a larger credit history. The top characteristics of this kind of credit card include Minimal or insignificant yearly charges minimal credit limit little to no rewards at all Basic rules and regulations.

Secured credit cards

If you have no credit history or a bad credit history, it could be difficult to receive a credit card. Yet, since secured credit cards are often issued against deposits made with the issuing bank, they can be useful in this situation. These are therefore the best options for those looking to raise their credit scores. Also, you can simultaneously earn interest on your bank deposit. The following are the main attributes of secured credit cards: only issued in exchange for security low enrollment costs Credit limit equal to the amount of the deposit good benefits for your purchases.

Rewards credit cards 

For every rupee you spend on eligible transactions and purchases with these credit cards, you receive rewards. For every Rs. 100 spent on online purchases, for instance, you can receive 2 reward points. The earned reward points can then be used to make purchases from a pre-existing selection of goods and services chosen by the card's issuer. As a result, you can earn while spending. Common traits of reward credit cards include the following: reward points on qualifying purchases Extra bonus points for purchases over a predetermined amount waiver of annual fees for spending that exceeds a threshold simple redemption once a specific amount of rewards have been accumulated.

Cashback credit cards

As the name suggests, cashback credit cards typically give a portion of the money spent as cashback for authorized purchases and transactions. Check the terms before you apply for this kind of credit card as the cashback may only be granted on certain "spend" categories. Also, the amount of money gained varies from card to card and from spend category to spend category. Here are a few of the key characteristics of this category of credit card: Money-back guarantee on specific qualified purchases Extra bonuses or reward points for certain purchases perks for brand-new cardholders Fuel surcharges at some gas stations are waived.

Travel credit cards 

The ideal candidates for travel credit cards are frequent travelers. Hence, whether you frequently take a flight for work or pleasure, these credit cards have several advantages. With each mile flown, they give out air miles as an incentive. After that, you can use your accrued air miles to buy tickets. Travel credit cards also come with a number of helpful features. Here is a brief overview of some of the best travel credit cards' characteristics. Benefits of comprehensive travel insurance Each year, free admission to domestic or international lounges minimal FOREX markup Free flights for a set number of people each year.

Premium credit cards 

These credit cards, as their name suggests, are exclusive financial items with stringent qualifying requirements. They provide exceptional, top-tier benefits. Premium credit cards are often only offered to persons with a specified income level due to the nature of the benefits. Among the primary characteristics and advantages of premium credit cards are: Personalized services a manager of personal relationships Free access to airport lounges and golf clubs High yearly costs.

Co-branded credit cards

In collaboration with leading brands across numerous sectors and industries, banks issue co-branded credit cards. Co-branded credit cards, which give special benefits and discounts when you make transactions for purchases from the brand partner, are frequently issued by banks in collaboration with market leaders. Co-branded credit cards have the following salient characteristics. widely regarded internationally Waivers of fees after spending a certain amount Exclusive benefits and savings from the brand partner Perfect for those who shop frequently and have high lifestyle costs.

Business credit cards 

For businesses who wish to make it simpler for their employees to pay for work-related expenses, banks generally provide Business credit cards. These cards are typically used to pay for travel for business purposes, lodging charges, and routine transportation expenses. Such cards are not given to every employee; they are mostly provided to those who frequently travel for business.

The following are some of the key characteristics of company credit cards:

Rewards points for consistent spending.

Points and rebates for qualifying purchases.

Separating business expenses is simpler.

Instead of the cardholder, the firm is in charge of the card.

Frequently Asked Questions (FAQs)

1. How many types of credit cards are there in India?

In India, there are many different kinds of credit cards. You can select from a variety of popular credit card categories, such as the ones listed below: simple credit cards with a guarantee Cards with rewards Credit cards for travel credit cards with co-brand commercial credit cards.

2. Which credit card type is the best?

There isn't a general, all-encompassing response to this query. It all relies on your financial objectives and needs. If you travel regularly, for instance, a travel credit card might be the best option for you. As an alternative, if you have already deposited money with the issuing bank, obtaining a secured credit card can be simpler. Similarly to this, if you do a lot of online shopping, you might want to think about getting a cashback or rewards credit card.

Conclusion

You may choose the type of card you require with greater knowledge now that you are aware of the various credit card varieties available in India. If you are qualified for many cards and can benefit from them, you can always apply for them. Keep in mind that you can have multiple types of credit cards in your financial portfolio. Simply keep in mind to pay the bills on time to avoid paying large interest fees and to take full advantage of the benefits and services offered by your credit card.