Last updated on November 8th, 2023 at 09:58 am
In India, there were approximately 8.5 crore citizens who owned a credit card as of June 2023. This is a considerable leap from the year-ago period’s 7.5 crores. While browsing various credit card types, a major attraction for most are the rewards they offer. This financial product adds value by offering lucrative cashback, discounts, and reward points.
Moreover, getting a credit card online has become easier and simpler, making it more accessible. But before applying, you must know the different credit card types available in the market.
Since different cards cater to a diverse range of needs, it’s important to understand the various types available in the market. Read on to learn more about credit card types and how to select the right one for your needs.
Table of Contents
Cashback Credit Cards
With this credit card, you can earn cashback every time you make a transaction. The cashback can range from 5-20% of your transaction amount. Generally, you can earn cashback in two modes: direct cashback or statement credits.
Any cashback deposited into your account after the transaction is a direct cashback. On the other hand, if the cashback lowers your credit amount, it is a statement credit.
Reward Points Credit Cards
Many credit card issuers offer reward points when you spend equal to or more than the fixed minimum amount. You can collect these reward points and redeem them to get air miles, cashback, gift cards, merchandise, discounts, and money.
Co-Branded Credit Cards
Credit card issuers partner with other credit card issuers or brands to offer exclusive discounts, cashback, and rewards to customers. With a co-branded credit card, you can get excellent airline, hotel, or retail store offers depending on the services the issuer offers.
This card can also work at a non-partner store. However, the rewards and perks you enjoy at partner stores may be non-transferable. This depends on the card issuer’s policies.
Lifestyle Credit Cards
Credit cards can help you elevate your lifestyle, as they can offer deals on everyday expenses like shopping, dining, movies, travel, and more. This card is ideal if you want to save more with transactions on everyday activities.
Moreover, some cardholders can enjoy premium benefits. This can include VIP lounge access, concierge services, golf course membership, exclusive dinner reservations, etc. In some cases, access to such cards is exclusive and locked behind certain conditions.
Entertainment Credit Cards
If you frequently book movie tickets, have OTT subscriptions, or indulge in other forms of entertainment, then an entertainment credit card is ideal. You can use this credit card to get exclusive discounts and offers on your entertainment-related expenses.
You may also get merchant-specific discounts on movie tickets, concerts, OTT subscriptions, etc.
Fuel Credit Cards
As the name suggests, this card is specifically designed to offer discounts and cashback on your fuel and gas-related expenses. Leading fuel companies like Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., and Indian Oil Corporation Ltd. offer fuel credit cards in partnership with top banks in India.
With this card, you can get a fuel surcharge waiver, reward points on transactions at partner gas stations, and additional discounts.
Travel Credit Cards
Travel credit cards can be beneficial if you spend a lot of money on travel booking, whether it is for business or personal travel. With this credit card, you can earn a discount on your ticket booking, accommodation booking, and other travel-related costs.
Premium Credit Cards
A premium credit card is the right choice if you have luxury spending habits. These credit cards have a high yearly cost, compared to regular cashback, or reward credit cards. However, they give your money’s worth through exclusive luxury benefits.
As a premium credit card holder, you can get several benefits, such as:
- Golf course membership
- Discounts on high-end dining
- Insurance and healthcare benefits
- Unlimited access to airport lounges and more
Business Credit Cards
Many cardholders use their cards to get instant credit to buy material for their business, pay bills, and expand their business. As a businessperson, these cards can help you maintain a steady cash flow.
Moreover, these cards have reward programs and cashback loyalty programs, among other benefits.
Student Credit Cards
This credit card offers discounts on college-related expenses. This includes shopping for books, fuel for transportation, leisure activities, and paying for tuition. However, these cards generally come with a lower credit limit.
But you can get excellent discount offers along with an interest-free period perk. Moreover, student credit cards do not have stringent criteria like those for other cards. Generally, you can get other credit cards only if you have a steady income and an excellent credit score.
However, for student credit cards, any college student above the age of 18 is eligible.
How to Select the Right Card Type?
Here are some points you must consider to decide which of these credit card types is best for you.
- Assess your spending habits and requirements
- Review your finances to understand the limit you want
- Check your eligibility for the cards you want
- Compare credit cards for their reward programs and offers
- Check the interest rate offered by the credit card issuer
- Review the fees and charges on the credit card types
Considering the many credit card types, it is important to research your options before you apply. Remember, you are responsible for your credit card, and misuse can affect your creditworthiness. So, choose wisely, and only opt for a card if it actually complements your spending habits.