As of May 2019, the number of credit cards grew by 27% as per data from the Reserve Bank of India. This exponential growth is witnessed mainly because credit cards have become a highly rewarding payment method owing to competition among financial institutions. It is not only quick and easy but also has customer-oriented features that are specific for every customer.
Those looking to avail one can choose from different type of credit cards. Few of these are mentioned below –
- Secured credit cards
Secured credit cards are offered against a fixed deposit. It gives the card issuer security in case the cardholder fails to pay his/her credit amount.
The credit limit of this card is lower than or equal or to the amount of their FD. This card is an excellent option for individuals who have no or low credit score. Such individuals can use this card and repay their debts on time to build an excellent credit history or repair their existing one. However, additional rewards available on these cards are limited.
- Unsecured credit cards
This is the most common type of credit card as the majority are unsecured. Unlike secured credit cards, this type of credit card has no such requirement of collateral. However, these cards are issued to applicants with a good credit score and a credible credit repayment history.
This credit card also has a pre-set limit, which can increase in the future. Unsecured credit cards offer exceptional benefits in the form of reward points. These points can be accumulated by making transactions through these cards.
These two type of credit cards can be further divided into the following subtypes based on their usage and their benefit –
Cashback credit cards
These credit cards offer cashback on transactions. Mostly, it is 1% of the entire transaction, excluding financial charges and interest. However, this rate solely depends on the card provider; sometimes, they are partnered with selected retailers that offer more cashback than usual rate. If appropriately used, customers can save a substantial amount on their transactions.
These credit cards are tailor-made to provide additional benefit on fuel purchases. You can combat high fuel prices with a credit card which offers benefits on purchases and transactions related to fuel.
For example, if an individual opts for a fuel card, it can offer discounts of around 1% on regular transactions like any other credit cards, however, on fuel purchases, they can receive discounts of up to 5% on each transaction.
Fuel cards are primarily divided into two types –
- General fuel cards are not brand specific and customers can use them at any fuel station.
- Brand-specific fuel cards offer better rewards to cardholders who purchase fuel from that brand’s fuel stations.
Travel reward cards
These credit cards offer benefits on travel-related expenses like hotel bookings, flight tickets, etc. These cards are beneficial to those individuals who travel regularly. However, these benefits vary from one credit card provider to another.
Sometimes, credit card companies have tie-ups with selected travel companies. If cardholders make their travel arrangements through that partner company, they can earn accelerated reward points. Thus, individuals must know credit cards benefits specific to each variant as well as offers provided by the issuer on the variant before making a choice.
Retail credit cards
Credit card companies often have a partnership with various retail outlets and e-commerce sites and shopping from such places can accumulate lucrative benefits for customers.
Nowadays, the best credit card in India offer one or more of these features, and some financial intuitions provide other additional benefits on their cards. For instance, credit cards like the Bajaj Finserv RBL Bank SuperCard offer industry-first benefits like cash withdrawal from ATMs, which is interest free for up to 50 days along with interest-free (up to 90 days) emergency personal loans.
Apart from this, the company also provides pre-approved offers. It helps customers to avail financing without any delay and saves them from the lengthy application process. These pre-approved offers are also available on other financial products like business loans, personal loans etc. Individuals can look into their pre-approved offers by providing essential contact details. Every type of credit card has its advantages, and these are very user-specific. Thus, it would help if you opt for a product based on your requirements, which will allow you to get the most out of your credit card.