8 Different Types of Credit Cards in India: All You Need to Know

Answering the question, “What is a credit card?” isn’t all that difficult, but picking the best one can be quite a task. This is because there are different types of credit cards, each with their own features and offers. So, whether you are a world traveller, a tech enthusiast, or someone who uses their card often, you’ll find one that caters to your distinct needs.

By using these cards, you can swipe to a smarter financial future to save more and unlock the world of rewards. Read on for more insights about these credit instruments and to learn about the various types you can get.

What are Credit Cards?

Credit cards are financial tools that allow you to pay for groceries, travel expenses, or any other expense via a line of credit. This is because issuers extend credit up to a pre-defined spending limit. The upside here is that these cards have well-defined rewards programs, and these add value. 

Unlike debit cards, you don’t spend money from your savings account when you make a transaction. Instead, you need to repay this borrowed money within a month or so, and this is the billing period. At this point, you can choose to make the minimum payment or pay your dues in full. To avoid unnecessary costs, you should pay off your credit card balance before the due date. 

Different Types of Credit Cards

Credit card companies offer various options, catering to different spending styles and goals. While you can consider cards with all bells and whistles, it helps to look for a card that matches your spending preferences. 

Here are some of the different types of credit cards in India:

Reward Point Credit Cards

  • These cards provide reward points on select purchases, the number of which generally is a fixed percentage of your spending.
  • Hence, the number of points you earn will depend on your chosen card. 
  • Most credit cards offer rewards on certain categories of purchases, so review whether your spending preferences match the reward structure before you choose the card.
  • Once you collect enough points, you can choose how to redeem them.  

Cashback Credit Cards

  • Unlike reward credit cards that require you to go through the point redemption process, these cards have a simpler rewards system. 
  • These cards offer a percentage of the bill or purchase as a refund for certain expenses when using your credit card.
  • As these instruments put a part of your spending directly into your pocket, they are the best way to make your everyday spending more rewarding. 

Premium Credit Cards

  • These are high-end credit cards that provide exceptional benefits to customers.
  • They generally require high credit scores and have a threshold income range, some being invite-only cards.
  • They typically have high joining and annual fees. 
  • Perks include exclusive club memberships, access to lounges, and more

Travel Credit Cards

  • If you are a frequent traveller, opt for a credit card that provides travel benefits. 
  • These cards generally offer bonus points on your travel bookings.
  • What’s more, you can also enjoy other exclusive deals, such as complimentary airport lounge access and concierge services.
  • They may also offer higher discount offers on air ticket fares and hotel stays. 

Fuel Credit Cards

  • These financial tools are generally a type of co-branded credit cards.
  • To cover the cost of processing payments done through a credit card, merchants levy a processing fee called fuel surcharge. 
  • This surcharge generally ranges between 1% and 2.5% of your fuel purchase. Most fuel credit cards offer a waiver on this surcharge.

Secured Credit Cards

  • These credit cards are an ideal option for those looking to establish or rebuild their credit profile.
  • Secured credit cards don’t have credit score requirements as you offer any of your fixed deposits as collateral to get them.
  • Being a secured credit facility, they also have a lower annual percentage rate (APR).

Co-Branded Credit Cards

  • Credit card companies partner with different brands across industries to offer these cards.
  • These cards are best suited for those who shop frequently from certain brands.
  • Loyal customers of a brand can earn higher reward points on every purchase they make from their favourite brand.
  • Apart from them, you can also make online and offline purchases at other retailers using this credit card.

Student Credit Cards

  • These types of credit cards are specifically designed for students to help them establish credit and learn financial discipline.
  • They have a fairly simple application process and typically no annual charges. 
  • The credit limit assigned is usually low

Understanding the offering in detail is the first step to picking one that truly suits your spending habits. If you want a premium card for all your diverse needs, get the One Credit Card.

Get 5X rewards on your top 2 spending categories, attractive discounts on dine-out, and exclusive travel benefits with this metal card. Using its powerful mobile application, you can track transaction limits and control all aspects of your spending. Apply now and get a card that enables you to spend confidently!

https://klighthouse.com/the-benefits-of-insurance-ensuring-a-secure-future/

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