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Different Types Of Credit Cards

IndianMoney.com Research Team | Updated On Thursday, October 10,2019, 03:25 PM

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Different Types Of Credit Cards

 

 

Credit cards are all about buying now and paying later. With a credit card, you can buy all the things you need. You just have to swipe that credit card.

Credit cards charge a very high interest, around 2-3% a month. This is a massive 24-36% interest a year. You must be very careful when using the credit card or you could land in severe debt.

Credit cards are of different types. You have basic credit cards with decent credit limits and many plain vanilla features. You have super premium cards which encourage a high-flying lifestyle. So there are cards for the salaried, people who fly frequently, the cautious spenders and the high-flying folk. Various credit cards have different features, and you must pick the credit card based on your needs. Now, say you are a frequent flier. Get a credit card co-branded with an airline.

Let’s take a look at the various types of credit cards. Want to know more on Credit Cards? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Types Of Credit Cards

1. Secured credit cards

Secured credit cards are good for citizens who have a bad credit score or no credit history.  Secured cards require a cash deposit to be placed on the card. The credit limit on a secured credit card is typically equal to the deposit made on the card, but it could be more in some cases. You're still expected to make monthly payments on your secured credit card dues. If you default on the card payments, banks will recover the amounts against the deposit. With a secured credit card, you can build a good credit history and then you’re eligible for a regular credit card.

To get a credit card, you must have decent income and a good credit score. You might not meet these requirements, but still need a credit card. This is when you avail a secured credit card. A secured card is secured against a fixed deposit where FD is the collateral. You open an FD at the bank and avail a secured credit card. You don’t need income proof. Banks generally offer a credit limit up to 80% of fixed deposit value.

2. Prepaid Cards

These cards require the cardholder to load money onto the card before the card is used and then spend it. The spending limit does not get renewed until more money is loaded onto the card.

The good part of these cards is that they do not have charges or minimum payments as the money is withdrawn from the deposits you have made. These cards are not actually credit cards, and they don't directly help you build a credit score. Prepaid cards are similar to debit cards, but they are not tied to a checking account.

3. Credit Cards for Women

Banks are offering special credit cards for women. These special credit cards for women are designed for the modern-day women. These credit cards give shopping and cashback offers. Women get benefits like fuel surcharge waiver and free insurance.

Banks want their female customers to get the best when they use credit cards. This is why banks offer credit cards which are specially designed for women. These cards focus on 2 aspects very important to women. They offer shopping rewards and cash back, useful for women who do a lot of shopping.

Women who use these credit cards get bonus reward points, waiver on fuel charges, cut on insurance premiums and so on. Many of these credit cards offer amazing travel benefits to women who love to travel regularly.

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4. Business Credit Cards

These cards are used for business purposes, rather than for personal use. These credit cards are great, whatever be your business. If you are a small business owner or even the owner of a larger business, you can use business credit cards for your business.

If your business defaults on the credit card, you (owner of the business) are held liable and have to make the repayments. Business credit cards offer unique benefits to business owners like cash back on purchases from certain stores, where you (businessman) are most likely to shop or a huge sign-up bonus or some travel perks.

5. Regular credit cards

The regular credit card offers convenience and safety. You also enjoy reward points and fuel surcharge waivers. You get free add-on cards for spouse, children and siblings.

6. Premium credit cards

When income increases, you can upgrade to a premium card. You enjoy higher credit limits and more reward points and other benefits. You enjoy lifestyle benefits like free access to airport lounge. Premium credit cards are great if you are a frequent flyer and spend more time at airports.

7. Super Premium cards

These cards are for lifestyle statements. You enjoy exclusive lounge access at airports, complimentary golf games, personal concierge and discounts on fine dining. These cards have very high credit limits and are by invitation only.

8. Co-branded credit cards

The co-branded credit cards are offered in association with a travel aggregator, a financial institution and a retail brand. All the privileges and benefits would be merged into a single co-branded credit card. The bank ties-up with a merchant to expand the customer base to the merchant’s clientele. With a co-branded credit card you get benefits like hotel or holiday accommodation, discounts on food and clothes, discounts on movie tickets and cheap airfare.

9. Contactless credit cards

You can make a contactless and seamless payment through a contactless credit card. You simply have to tap the contactless credit cards at the merchant’s POS terminal. You don’t require a PIN number and payments are secure. You also enjoy discounts, cash rewards, reward points, welcome gifts and airport lounge access.

10. Entertainment cards

These credit cards are mainly for entertainment needs. You enjoy discounts like ticket booking for events, shows and concerts. You enjoy offers like buy 1 and get 1 free on movie tickets. You get reward points which you can redeem for gifts.

11. Lifestyle cards

These cards are for those who court luxury. This is for travelling, dining and entertainment expenses. Lifestyle credit cards offer reward points based on the amount you spend. The travel and dining benefits make your travel more enjoyable. You get vouchers for a buffet lunch at top hotels. You also enjoy insurance cover, shopping discounts and cashback on air and train tickets.

12. Commercial cards

The commercial card is used for business-related expenses. You can save on business travel and expenses, easily managing payments on purchases. With commercial cards, the businessman can manage both personal and business expenses. You get fuel surcharge waivers, hotel accommodation, travel deals and airport lounge access.

13. CashBack cards

The cashback credit card helps enjoy cashbacks with daily spends. You enjoy shopping and dining discounts. Some of the benefits of cashback cards are fuel surcharge waiver, interest-free credit, smart bill payments and zero liability after reporting lost or stolen credit cards.

14. Balance Transfer Credit Cards

A balance transfer credit card helps transfer outstanding amounts from a high-interest card to a low-interest credit card, thereby helping escape the loan trap. So the benefits of a balance transfer credit card?

You could definitely save on credit card interest with a balance transfer credit card. This is because you are transferring the outstanding balance from a high interest credit card to a lower interest one. Processing is really quick and you save time. You can transfer outstanding balance from multiple credit cards to a single credit card.

15. Fuel Credit Cards

These credit cards are great for petrol refuelling. You enjoy cashbacks and fuel surcharge waivers. If you are in the transport business, use fuel credit cards to save money.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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