Understanding the different  types  of  credit  cards  in India before you pick

Credit cards in India emerged as a big alternative for bundles of cash in wallets in recent times. They are called plastic money. The security and convenience offered by cards are the reason for their popularity today. These types of credit cards in India play a key role in increasing the purchasing power of the user. The best part is the user enjoys an interest-free credit period until the due date.  You are obliged to repay the used credit limit at the due date. Defaulting the timely repayment of the credit will penalize you with the late payment fee and interest rate as well. There is no pre-payment penalty while using these cards.

Why is a credit card a good idea?

 The credit card is a proven alternative for bundles of cash in the wallet today. Using a credit card as a cash alternative keeps you worry-free about the cash in your current account.  The right amount will be deducted from your credit limit towards the payment after you make a purchase, nullifying the chances of a wrong transaction.  Many banks are benefiting the customer with reward points on each purchase. Making a big ticket purchase with a credit card will not only offer you convenience but also entitle you to cash-back rewards, miles rewards and much more.

How many types of credit cards in India?

Secured credit cards

Money deposits back the secured credit cards as collateral. You can use credit card up to the relative credit limit. These types of credit cards are mostly used by people who have yet to establish their credit history. Fetching these credit cards is quite easy because the risk of issuing them is relatively low.  Keep your spending relative to your credit limit in order to establish a strong credit score, which is important for fetching different types of credit cards and loans offered by banks in the future.

Standard credit cards

These credit cards are easy to understand, try these credit cards if you are using the credit cards for the first time. These cards hold revolving credit balances up to a certain credit limit, which differs from customer to customer depending on their credit profile. Once you repay the used amount at the end of the credit cycle, the credit limit is again available for your purchases.  A penalty is levied on the outstanding balances at the end of the credit cycle.

Rewards Credit Cards

These types of credit card in India is a popular option among users today because they earn rewards while they spend. It can be in the form of cashback miles or travel offers. They also get a chance to earn reward points as a signup bonus, renewal bonus, etc.  You can either redeem these rewards for cash or merchandise of your choice.  If you are a frequent traveller, travel rewards cards turn out to be your priority because they earn you free flights, hotel stays and other travel benefits.

Auto / Fuel Credit Cards

Fuel cards turn out to be your option if you hold a vehicle that is used for long and local transportation.   These cards reward you with cashback and a surcharge waiver on every fuel purchase. These accumulated reward points should be redeemed for refuelling.

Balance transfer Credit Cards

Most of the different types of credit cards offered today come with a balance transfer option. The benefit of using credit card balance transfer that are specially designed for the purpose is they come with a low introductory rate on balances for a specific period. You can make the payment of your old card balance at no/ lower interest rate for a certain period of time. However, there is a nominal fee for balance transfers through these cards.

Student Credit Cards

These types of credit cards in India cards are specially designed for students to help them establish a credit history. It would be easy for the student to get these credit cards through third-party service providers rather than applying directly. You may enjoy many additional features like low balance transfers and interest rates.

Business/Corporate Credit Cards

These business types of credit cards in India cards are designed to add great convenience to the business owner in managing the finances effectively. The manager can issue credit cards to the employees for making business transactions. As an additional benefit, the manager can get the name of the company embossed on it.

Contactless Credit Cards

Mostly, all types of credit cards today are designed with unique payment technology that allows the user to make the payment through POS terminals. You do not need to enter any PIN to make a transaction, so these cards are extremely secure.

Subprime Credit Cards

These different types of credit card credit cards are issued to people with bad credit. They have high-interest rates and fees. These cards are a good option to repair your bad credit

Limited Purpose Cards

As evident by the name, these cards can be used for a specific purpose only. They have low credit limits and low finance charges as well. Store cards and gas cards are a few examples of this limited proposed card.

International Credit Cards   

International credit cards are for global travellers. These cards offer a great convince while making international purchases. You can keep away from the headaches of currency conversion, and it offers more security on your international trips.

Eligibility

Age18 years
ProfessionSalaried/ self employed with regular source of income to pay back bills
Credit scoreGood
Bank accountsSavings account on your name

Documents

DocumentsSalariedSelf- employed
Identity proofVoter ID/ Passport Copy/ Driving License/PAN card/ ID card issued by employerVoter ID/ Passport Copy/ Driving License/PAN card/ ID card issued by employer
Address proofPassport Copy/ Utility Bill (Electricity, Water)/ Rental Agreement/ Ration CardPassport Copy/ Utility Bill (Electricity, Water)/ Rental Agreement/ Ration Card.
Income proof Latest 3 months’ salary slips
Salary account bank statement for six months.    
Latest IT Returns with computation of income and other certified financial documents Business continuity proof.  

 Aspects to look on for choosing a different types of credit card

Interest free period

It is important that you know about the grace period when you use types of credit cards in India.  The grace period is interest interest-free period after your billing cycle. Any purchase made within the due date remains interest-free. If the billing cycle is from 1st January to 31 January and the due date is March 1st, the period between the billing date and the due date is called a grace period. If you don’t repay the used credit by the due date, you will be liable to pay interest and other charges.

Interest Rate

 Interest rates on different types of credit card credit cards are high when compared to other types of loans offered by banks. Not only the outstanding balance but the purchases you make thereafter will also attract high-interest rates until the complete balance is paid off. Cash advances on credit cards will also have high-interest rates with no grace period. These banks will charge interest rates on the advances from day one till you pay off.

Cashback

If you are managing your monthly expenses through credit card purchases, these cash-back cards turn out to be the right option for you. Apart from benefiting from the regular discounts offered by the stores, you will get cash-back rewards on every purchase you make through cards. Our team has a piece of knowledge about different cards with cash options and will help you pick the right one as per your requirements.

 Discounted cards

 Before you apply for a credit card, our expert understands your purpose for applying for the credit card and suggests the right options available. If you are a loyal customer of a specific store, you can opt for the discounted cards offered by partnered banks.

Other aspects

Many different types of credit cards offer reward points programs to draw the attention of customers. You need to understand reward programs offered by the banks, which help you pick the cards that match your spending patterns.

 

 

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