Credit Card Types - Find out the different types of Credit Card options available in India that has various features & benefits to offer based on your needs. Check out the credit card which provides cash back, reward points, discounts, etc.
There are hundreds of Credit card options available to newbies. Each card has different features and caters to specific needs. The benefits offered by these cards also vary.
Banks and financial institutions offer a variety of cards. Their Credit limits are different and the facilities they provide are also different. While some provide cashbacks, others provide reward points. Then there are those that offer discounts or exclusive access to airport lounge and select dining facilities.
Before choosing the right Credit card for you must know about these types. Based on your needs and the benefits on offer, find the right match.
Credit card for women
There are Credit cards which are custom-made for women customers. These Credit cards offer special discounts across department stores, grocery chains and supermarkets. Women who enjoy dining out will have an advantage as Credit cards for women have special offers for dining, apart from other lifestyle products.
While some banks offer rewards on entertainment expenses such as movie tickets, others offer rewards on flight travels. Almost all banks have now rolled out one or more Credit cards for women. Women have the advantage of choosing between Credit cards for women and other cards.
Silver Credit cards
Silver Credit cards are entry-level premium Credit cards. This means that while the benefits on a silver Credit card may not be as much as those on gold or platinum Credit cards it has more advantages than a classic Credit card. A silver Credit card is specifically designed for salaried employees who seek premium rewards. The card usually has no or low annual fee. It is available to people who have a decent Credit history. The interest-free periods on these cards range from 25 to 50 days.
Gold Credit cards
Gold Credit cards are premium Credit cards meant for high-income individuals. It is available only against a good Credit score. These cards have higher Credit limits and allow as much as 100 per cent cash withdrawal limits. They offer higher rewards on purchases and exclusive access to dining restaurants as well as access to airport lounges. There are cashbacks on travel and accommodation. Add-on cards can be issued to family members of the primary cardholder from the same account. Apart from high rewards, a gold cardholder gets cashback offers, reward points as well as free insurance of travels. Some gold cards are also insured against loss and theft.
Titanium Credit cards
Titanium Credit cards are also premium Credit cards which offer advantages similar to that of a gold card. With a titanium Credit card, you can opt for a revolving Credit facility, which means that your Credit is upgraded as you pay off your debts. Apart from that, Titanium cardholders are also eligible for the Titanium Rewards Point Program. Members also get insurance coverage and accident covers. Here, too, the cash withdrawal limits are high. Apart from offering air miles and cashbacks on purchases of lifestyle products, many Titanium cards come in association with retailers and merchants, hence, offering discounts at these shops.
Classic Credit cards
These are entry-level Credit cards offered by almost all banks and financial institutions. In most cases, banks charge no or nominal annual charges. The Credit limits may not be very high on these cards. These cards are ideal for beginners. They can get rewards and cashbacks on purchases and keep their Credit score by making timely payments. Among other benefits, these cards are accepted globally and can be used in any country for purchase of goods and services. The cards also allow for cash advances to members. Classic cardholders also get waiver on fuel surcharges and travel insurance with their Credit cards.
Rewards Credit cards
Rewards Credit cards are specifically designed to suit the needs of shoppers. The cardholder earns rewards points for every purchase. These rewards are basically points gained for shopping that can be redeemed at the end of the month. These rewards points can be redeemed top purchase products and goods as specified in the cards. Most rewards Credit cards have tie-ups with shopping malls or retail outlets. The interest rates on these cards may be slightly higher than that of other cards. It is issued only to those individuals who have a high Credit score. In few cases, there are also cash rewards for purchases made using the card. These cash rewards can help you pay back your Credit.
Business/ corporate Credit cards
Business or corporate Credit cards are for companies and businesses, limited companies, banks, government-run companies and partnerships. These cards are available to any business—small or large—that needs an account to keep a track of its expenses. If you have a small business, or a corporate office, you can have a Credit card for your business. Cards can be held primarily business head but cards can also be issued to employees. The employer will have the option of capping monthly Credit limit to control expenses of employees. Payment for multiple cards can be done at once. There are rewards for expenses on travel, accommodation as well as entertainment.
Cashback Credit cards
As the name suggests, cashback Credit cards are the ones that offer cashbacks on purchases made using the card. With these cards you can get cashback returns of anywhere between 5 to 25 per cent. The percentage of cashback is different for each card. Most cashback Credit cards offer cashback on fuel surcharge. They may also waive off a percentage of the surcharge. Another benefit of these cards is that the annual fee is adjusted against the cashbacks. Attractive cashback offers are available on purchase of groceries, movie tickets and payment of bills. There are also dining privileges at select restaurants that come with a cashback card.
Entertainment Credit cards
As the name suggests, entertainment Credit cards offer discount and rewards on purchase of entertainment products. You could enjoy offers such buy one movie ticket and get another free. The cards also have discounts on events around you. There are shopping benefits, rewards to be won on lifestyle products. Some cards also offer access to golf clubs. There are rewards to be won on travel bookings. The rewards accrued can be used in turn to buy movie tickets or make travel bookings.
Lifestyle Credit cards
Most lifestyle Credit cards are premium Credit cards offering benefits in the lifestyle segment. They are created to fit the needs of individuals whose income and lifestyle changes with time. The cards give access to golf clubs, exclusive dining privileges in select restaurants as well as discounts on travel. They also give access to luxury lifestyle privileges and entry into clubs. There are higher rewards on shopping and travel bookings.
Prepaid Credit cards
These cards are similar to debit cards but with the benefits of a Credit card. The bank lets you deposit a certain amount in an account. This amount becomes your Credit limit against which you can swipe the card. Every time you use your card to make a payment, the amount is deducted from the account. Although there is no Credit issued to the cardholder, there are privileges and rewards to be accrued through every transaction of the card. As the Credit limit reduces, you can make a payment and get your Credit limit upgraded again. These Credit cards are ideal for individuals with low Credit score.
Travel Credit cards
These are Credit cards that offer travel benefits. Travel cards such as the HDFC All Miles Credit card are usually offered by banks in association with travel websites and airline companies. The cards offered in association have special discounts and offers for bookings on these airlines and portals. The cards have benefits such as air miles, access to airport lounges as well as rewards points. The travel cards are eligible for benefits for travels across the world. Apart from travel, there are benefits on hotel accommodations as well as holiday packages.
Balance transfer Credit cards
Almost all banks allow customers to transfer their outstanding balance from a Credit card to a new card. Banks also allow inter-bank Credit transfers. This means that if you have a Credit balance on your HDFC Credit card, you can transfer this balance to a new Credit card in ICICI bank. Most people with poor Credit score choose these cards to transfer their Credit and covert the balance into easy EMIs on lower rate of interest. This gives a fresh chance to the cardholder to improve her/ his Credit score. It also reduces the debt-burden on the cardholder.
Secured Credit cards
Secured Credit cards, as the name suggests, are issued against a security amount deposited by the cardholder. Banks let customers, who have poor Credit score, open a fixed deposit and then issue a Credit card to the customer. The fixed deposit is on lien in favour of the bank, in case you default on your Credit card. This card is ideal for those have a poor Credit score and are having difficulty getting a Credit card. The Credit limit is usually a percentage of the total fixed deposit amount. You can also transfer your Credit balance from another bank Credit card to this one and convert the Credit into equal instalments. The interest rates on these Credit cards are lower than that of secure Credit cards.
Subprime Credit cards
A subprime Credit card is meant for individuals who do not qualify for a Credit card under the market interest rate. These individuals have poor Credit history. It is often known as a second chance lending. It is a phenomenon started in the United States of America in the 90s. The cards were meant for those with bad Credit score, loan defaults or even those who were bankrupt. The Credit limit of these cards is low and interest rates are much higher than the market rates. Few banks and non-banking finance companies are offering these cards in India.
Student Credit cards
Credits cards issued to college going students are referred to as student Credit cards. These cards are valid for five years and have very low interest rates. The card is issued to students who are 18 years old or older. These cards have very low Credit limits compared to other Credit cards in the market. This is to make sure that the student doesn’t fall into the debt trap by overspending. The customer does not need to submit any income proof to get a student Credit card. Many banks offer student Credit cards as add-on cards to their parents’ cards. Student Credit cards also offer deals on shopping as well as food expenses.
How do I know which Credit card is best for me?
Different banks offer different Credit cards suited to different needs of customers. You need to check the features of the cards that you are eligible for. Visit the websites of the banks you are interest in and check the Credit cards available. Once you know the cards you are eligible for, you can compare their features and decide which one works the best for your needs.
Which Credit card is best for a beginner?
You must check for the eligibility criteria of each Credit card before you decide on one. Many banks offer classic Credit cards which work best for beginners. They have a low Credit limit and a lower rate of interest compared to other cards in the market. There are also rewards Credit cards and cashback Credit cards that could work for beginners.
How can I get a premium Credit card?
Premium Credit cards are issued to members who have a good Credit score and have not defaulted on Credits or loans. Premium cards are also issued to people with high income. If you have a Credit card, you can ensure that your Credit score is well-maintained for at least six months and apply for an upgrade to a premium card. Or if you fall in the high income category, you can directly apply. Check whether you are eligible for a premium card before applying.