Credit cards have become increasingly popular today as a convenient tool for managing personal finances and helping conduct smooth transactions. The financial industry in India offers a multitude of credit cards catering to the specific needs and preferences of consumers. Let’s take a look at the different types of credit cards available to consumers in India today.
Standard Credit Cards
This is the most basic type of credit card available to consumers in the market today. It is a simple way of accessing credit and managing daily expenses. However, these cards don’t offer any specific features or rewards and are only meant for basic credit use.
Reward Credit Cards
This is one of the most popular credit cards available today. Reward credit cards offer reward points for every transaction made via the card. These points can then be redeemed for gifts, cashback, vouchers, or merchandise.
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Travel Credit Cards
These cards are meant to cater to avid travellers. For those consumers who love travelling and want to do it in the most economical way, they can use travel credit cards to benefit from every travel-related expense made via the card. In turn, these cards provide benefits like air miles, hotel discounts, and lounge access along with other travel-related perks to the consumers.
Cashback Credit Cards
These credit cards allow the consumer to benefit from spending their money by earning back a percentage of their expense as cashback. These cards are apt for consumers who prefer direct savings on their purchases. The amount of cashback earned on every transaction varies, depending on the card issuer and the type of purchase made.
Fuel Credit Cards
Fuel credit cards offer discounts, cashback, and rewards on fuel purchases at select petrol stations. These cards are perfect for consumers who spend a lot of their money on fuel expenses. The reward points earned in this category can be used to purchase fuel also.
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Premium Credit Cards
Premium credit cards are meant to provide luxurious and exclusive privileges to customers. These cards are typically charged at a higher annual fee and provide benefits like concierge services, and premium airport lounge access, among other comforts. They are generally offered to customers with a good credit rating and higher income.
Business Credit Cards
These cards cater to entrepreneurs and business owners. They provide specific benefits such as expense tracking, rewards meant for business expenses, and credit limits according to corporate requirements. These cards also come with a longer interest-free credit period, and business-related benefits such as a cash advance facility, hotel and travel benefits, insurance covers, etc. Additionally, business credit cards often help in keeping a separate track of personal and business-related expenses.
Student Credit Cards
These cards typically have lower credit limits and are meant for students pursuing higher education. Apart from offering them access to credit, these cards help young adults build a credit history. Students also benefit from the discounts and rewards given on fuel transactions, book purchases, etc.
Secured Credit Cards
Secured credit cards are offered to individuals with poor or limited credit history. These cards are offered against a security deposit to ensure customers use them responsibly and help them rebuild credit.
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Co-branded Credit Cards
These types of credit cards are provided in partnership with certain brands or companies. They provide customers with rewards and offers related to those brands and are a way for brands to reward customer loyalty. As part of the rewards, these cards sometimes provide customers access to special events, and exclusive deals related to the brand.
While credit cards offer a lucrative method of dealing with expenses without putting a burden on your liquidity, it is essential to use them judiciously. A credit card should be chosen keeping in mind your lifestyle choices and financial needs, but should always be used like a debit card to ensure you don’t fall into a debt trap. If used well, credit cards can pave the way for individuals to maintain a financially healthy life while taking advantage of the perks they offer.