In the period following demonetisation, consumer attitude towards electronic modes continues to be positive and progressive. Consequently, 10.6% of the organised retail sector has made considerable changes to accommodate such electronic payment methods, largely inclusive of credit cards.
As a result of such growing applicability, acceptance, and advantages of credit cards, the numbers of such cards have also grown substantially over the years. Millennials or individuals below the age of 30 years have been major drivers of the rise in the number of credit cards. According to reports, the number of millennial cardholders has increased by 35% in the current Financial Year. Experts attribute such growth to an improved credit infrastructure and multiple types of credit cards to accommodate varying types of customers.
Different types of credit cards in India
There are several variants of credit cards, each with its individual set of features which account for various needs of different users. These cards are tailored to help users meet their financial needs with ease. The different types of credit cards available in India are discussed below –
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- Secured credit cards
This type of credit card is for individuals with a low credit score or for those availing a credit facility for the first time and do not possess a credit history. In case of secured credit cards, individuals are required to provide a collateral to the card issuer in the form of fixed deposit. Such credit cards share similar features to that of an unsecured credit card. The only distinctive point is, in case of secured credit cards, if an individual fails to repay their dues, the card issuer can liquidate the fixed deposit to compensate for delinquency. It can be a convenient starting point for individuals to build their credit score if they know how to use a credit card wisely.
- Business credit card
Also known as corporate credit cards, these are availed by business entities such as companies, limited liability companies, sole proprietorship firms, etc. Such cards help business institutions meet their financial obligations and keep an orderly track of such expenses. These credit cards are exclusively provided to business entities and can be availed by eligible business organisations.
- Travel credit card
This card is designed for individuals who travel frequently. They come with benefits such as discounts, vouchers, cashbacks, and accelerated reward points on flight ticket purchases, bus or cab tickets, hotel bookings, holiday bookings, etc. You can avail such benefits when you book flights or hotels from companies who are partnered with the respective card issuer. Individuals can also enjoy complimentary airport lounge access with cards such as the Bajaj Finserv RBL Bank SuperCard.
- Student credit card
A student credit card is exclusively offered to individuals who are pursuing their higher studies and above 18 years of age. Such cards have lower credit limits and also come with more affordable interest rates. These cards often have offers on food, accessories, and other relevant expenses. They are either provided individually or on and above their parents’ credit card.
- Lifestyle credit card
Such cards come with exclusive offers for purchases and transactions in the lifestyle segment. These are generally premium level credit cards and are provided to individuals with a considerably high credit score. These cards have offers on fine dining in selected restaurants, offers on travel, etc. With certain credit cards, individuals can also avail waiver on fuel surcharges with the necessary reward points.
- Entertainment credit card
This type of credit cards provides offers on entertainment-related expenses. For instance, individuals can avail discounts on movie tickets, events, etc. with the offered reward points. Such cards also provide offers on lifestyle and travel expenses.
- Balance transfer credit cards
Almost all forms of credit cards can be classified as balance transfer credit cards. As such, individuals can get a credit card to transfer the outstanding balance from an existing card. In most cases, such balance transfers are availed when a financer offers more convenient terms such as lower interest rates compared to the existing one.
However, there are certain things to know before applying for a credit card, such as checking for additional charges, reward points, etc.
Reputed financial institutions such as Bajaj Finserv also provides pre-approved offers on credit cards to minimise time and effort required to process the application. These offers are available on several other financial products as well including personal loans, business loans, home loans, etc. Individuals can check their pre-approved offers by providing their name and phone number.
Consider your spending habits and requirements and opt for a type of credit card that best compliments both. Maintain a healthy CIBIL score around or above 750 to avail the most beneficial terms and features on the card.