Different Types of Credit Cards in India

Your Credit Cards is a beneficial product to have in your financial toolkit. However, with so many types of Credit Cards available in the market today, how do you choose the right one? It is simple. Each type of Credit Card comes with unique advantages. So, it is best to understand the benefits of all types of Credit Cards and choose one that aligns with your lifestyle and monthly cash flow needs. 

Classification of Credit Cards

Reward Credit Cards 

This Credit Card allows you to earn reward points each time you shop and redeem them against a range of curated products. You may also be eligible for vouchers on specific categories such as dining out or a salon service. 

Cashback Credit Cards 

This Credit Card lets you earn a percentage on the value of your shopping bill in the form of a cashback. Your cashback is instantly credited to your savings account , and you can use the money to purchase products and services online or offline. 

Shopping Credit Cards

Retail cards enable you to enjoy exclusive deals on your favourite retail platform or store. This is a beneficial card if you are a regular shopper at a specific retail brand, such as an e-commerce platform. You can enjoy exclusive discounts, earn points, receive cashback, free home delivery, and connected perks.

Secured Credit Cards

If you have a low Credit Card score, no credit history, or work as a freelancer, then securing a regular Credit Card may be difficult. This is where secured cards come in handy. You offer a security deposit as collateral and can make purchases up to the value of the deposit. By paying your bills on time, you can build your credit score and graduate with an unsecured card. 

 

Travel Credit Cards

If you travel a lot within the country or internationally, then this is a must-have in your financial toolkit. You can benefit from attractive deals and offers connected to hotel stays and car rentals, and your air miles can help bring down flight costs. 

Also Read: Best tips on leveraging travel Credit Card benefits!

Business Credit Cards

This card is ideal for use by small businesses, banks, limited companies, government-run companies, partnerships, and sole proprietorships. Business cards can be used by founders, senior management, and employees for specific business expenses such as furniture, business travel, machinery, and electronics. Benefits include access to revolving credit, and higher cashback and rewards than on regular Credit Cards. 

Balance transfer cards

Your balance transfer card allows you to transfer the amount owed from your card issuer to another one, which comes with lower interest rates and charges. This is a handy card when you have a large outstanding amount to be paid and aspire to do so at a lower interest rate and reduce penalties. You can negotiate for better terms such as halting interest rates for a fixed period, with a potential balance transfer card issuer.  

Student Credit Cards

As the name recommends, this is a handy card that can help students subsidize their expenses through unique deals and exclusive offers. For instance, if a student is studying abroad, usage of such a card can help reduce travel and dining out expenses and reap the benefits of reward programmes. 

Fuel Credit Cards

With fuel prices on the rise, your fuel card can get you shopping discounts, cashback and waivers on fuel spending. You may also be able to redeem fuel points against grocery bills and bill payments. Bring down your fuel expenditure with this handy Credit Card.

Premium Credit Cards

Consumers in a higher income bracket and creditworthiness can benefit from owning a Premium Credit Card. It comes with superior perks such as access to savings on dining, golf courses, hotel booking, airport lounges, discounts at top-rated spas and airfare. The annual fee is usually on the higher side for these kinds of Credit Cards.

Also Read: How to redeem rewards on Axis Bank credit card?

Store Credit Cards

Store Credit Cards can be used at specific stores with which the issuing bank has partnered, to provide credit to customers. These cards help shoppers buy items from the partner outlets on credit and pay them over time.

Co-branded Credit Cards

This is a card that a business/retailer offers in partnership with a Credit Card issuer. It usually bears the logos of both the business/retailer and the Credit Card company. Co-branded card perks include discounts, reward points, or cashback when used with the sponsoring merchant.

Low-interest and charge cards

The average interest rate on Credit Cards a month ranges between 3.5% and 3.75%. On the other hand, the interest charged by low-interest cards is usually between 1.5% to 2.99%. However, such cards come with limited perks such as rewards, air miles, cashback, offers, and discounts.

Charge cards come with no pre-set credit limit. Consumers who anticipate spending a large ticket size each month can benefit from charge cards. However, unlike a regular card, which allows you to make a partial or late payment, you need to pay the full amount each month or incur a penalty.

Both cards are usually reserved for HNIs with a solid credit score and a low-risk profile.

Conclusion 

Choosing the right one from an array of different types of Credit Cards is an important financial decision. Understanding what each classification has to offer is key to success. Axis Bank has all kinds of Credit Cards, that cover the full spectrum of consumer lifestyle and cash flow needs. Innovations such as online applications and video KYC make the activation process simple, secure, and seamless. You can benefit through innovative reward programmes, fuel waivers, and perks like complimentary airport lounge access.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.