In 2019, there were around 52 million credit card users in India, and this number is only rising. Moreover, according to recent statistics, India also recorded a 27% increase in total credit card transactions last year. It suggests that more individuals are now opting for this handy financial tool over traditional payment options to meet their expenses. Credit card companies also issue different types and categories of credit cards to complement various spending and lifestyle needs of individuals. It is ideal to learn more about these credit card types before you opt for one.
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Credit card categories
1- Secured credit card
Individuals who do not have any prior credit history or have a poor credit score can opt for a secured credit card. These cards are issued only against collateral such as a fixed deposit. While their usage is similar to other cards, they offer fewer reward points and benefits.
2- Unsecured credit cards
Card issuers provide these payment instruments to users against a set of eligibility criteria. They are available in different credit card types to fulfil varied spending needs. While they attract a few additional charges, responsible usage and reward programs can multiply the benefits derived from these cards.
Types of credit cards
Business and corporate credit cards
Large firms and corporate organisations issue credits cards to their employees to fund their business-related expenses. They are issued in the name of the enterprise and may carry the name of respective cardholders as well.
With these cards, companies can regulate how much an employee spends on a transaction. Accordingly, it will enable them to streamline their expenses. Moreover, the company will be responsible for paying off the outstanding amount on a corporate credit card. Hence, the employees’ credit scores will not be affected at all.
Small and medium businesses can opt for business credit cards. However, unlike corporate credit cards, these are issued in the name of the business owner or the employee who avails it and will be responsible for bill payment. Additionally, both business and corporate credit cards offer reward points on transactions which can be redeemed to avail attractive discounts and cash backs.
Travel credit cards
Individuals who need to travel frequently for business or leisure can avail a travel credit card. These cards offer several benefits such as access to domestic and international airport lounges, accelerated reward points with every booking, air miles etc. You can redeem your credit card reward points to avail discounts on flight tickets and hotel bookings.
Fuel credit card
These cards are designed for those who spend a significant amount monthly on fuel purchases. Hence, you should learn how to combat high fuel prices with your credit card.
With a fuel credit card, you can earn fuel surcharge waiver and reward points on refuelling with partner petrol stations throughout the country.
Lifestyle credit card
It is one of the most popular credit card types in India. These cards are designed to cater to various lifestyle needs such as restaurants, shopping, movie tickets bookings, etc. One can collect reward points on payment for such lifestyle products and services.
Additionally, other credit cards not only bring such card types on offer but also provide some industry-first features like interest-free cash withdrawal, emergency loan against the unused credit limit, etc.
There are also other types of credit cards such as onlinecreditcard, credit cards for women and students, cash back credit cards, prepaid cards, platinum, and gold credit cards and so on. Credit cards are a crucial financial tool with potential for both credit profile build-up and damage. Hence, you should apply for one only after carefully considering all these points. It includes your spending requirements, welcome benefits and reward points on various credit card types, along with associated fees. Furthermore, make sure to read the terms and conditions set by card issuer before applying.