What are the different types of credit cards in India?

Credit cards are an incredibly convenient way to pay for your day-to-day purchases, but did you know that there are different types of credit cards available in India? This blog post will take a detailed look at the different types of credit cards available in India, their features, and how you can use them to your advantage. 


From travel rewards to cashback cards, we will explain each type of card’s various features and benefits and provide you with the information you need to make the best decision when choosing a credit card.


What are the different types of credit cards in India?

When it comes to credit cards, there are a number of different types available in India. These range from basic no-frills cards to those offering more specialized features and rewards. Here is a brief overview of the various types of credit cards available in India:


  1. Standard Credit Cards: These are the most basic type of credit cards available in India. They offer a low credit limit, typically up to a maximum of Rs 1,00,000, and a lower range of benefits than other cards. The interest rate on these cards can be as high as 36% per annum. 
  2. Gold/Premium Credit Cards: Gold/Premium credit cards offer higher credit limits of up to Rs 2,00,000 and provide access to exclusive benefits such as cash back, airline miles, and reward points. The interest rate on these cards is usually around 24-30% per annum. 
  3. Rewards Credit Cards: These credit cards offer more specialized features such as reward points, cashback and other benefits. Rewards cards are designed for those who like to shop and travel frequently.
  4. Travel Credit Cards: As the name suggests, these cards are designed for travelers and offer various features such as airline miles, discounts on hotel bookings, lounge access, and free travel insurance. The interest rate on these cards is typically higher than standard credit cards, ranging from 25-35% per annum. 
  5. Secured Credit Cards: Secured credit cards are the best option for people with a limited credit history. These cards require a security deposit which the issuing bank then holds until the cardholder pays off their dues. The interest rate on these cards is usually lower than that of standard credit cards.


What are the benefits of each type of credit card?

Credit cards offer a variety of benefits depending on the type you choose. Here are some of the most common benefits associated with different types of credit cards in India. 


  1. Standard Credit Cards: A standard credit card is a great way to establish and improve your credit score. As long as you pay your bills on time and in full each month, your credit score will go up over time. With a standard credit card, you can buy goods and services without having to pay for them upfront. This makes it easier to make larger purchases when needed.
  2. Gold/Premium Credit Cards: With these cards, you have access to exclusive rewards, discounts, and higher spending limits. Gold and Premium credit cards often come with superior customer service and extra perks such as travel insurance, access to concierge services, and exclusive benefits from partnered retailers.
  3. Travel credit cards: One of the biggest benefits of using a travel credit card is the ability to save money on airfare and hotel stays. Many travel credit cards offer rewards in the form of cash back, free flights, free hotel stays, discounts on car rentals and more. 
  4. Rewards Credit Cards: Rewards credit cards offer a wide variety of rewards that can be used to save money on everyday purchases such as groceries, gas, and travel. You can also earn bonus points for spending with certain merchants or online stores. Rewards cards usually have an annual fee, but the rewards can often be worth it.
  5. Secured Credit Cards: Secured credit cards are designed for those with bad or no credit who are looking to establish or rebuild their credit history. They require a security deposit to open, which is equal to the amount of the card’s limit. Secured cards are reported to the major credit bureaus, so responsible use can help you build a better credit score over time.


With all of these benefits, it’s no wonder why so many people are choosing to use Gold and Premium credit cards. However, other cards too have benefits. 


How do I choose the right credit card for me?

When choosing a credit card, there are a few things to consider. First, consider your spending habits and determine which type of card fits you best. For example, if you plan on using the card for large purchases, you may want to look into a gold or premium credit card, as they often offer more rewards and perks than standard cards. On the other hand, a classic card may be more appropriate if you are looking for a card that will provide a lower interest rate.


Secondly, look at the different offers and fees associated with each card. Compare the annual fee and APR (annual percentage rate) across multiple cards to ensure you get the best deal. Additionally, consider any rewards or sign-up bonuses that the card may offer. Some cards may provide cash back or travel rewards, while others offer discounts at certain retailers. 


Finally, check the credit limit offered by each card. Many cards will have a preset limit, so make sure the limit is high enough to cover your spending needs. It is also important to note that some cards may require good credit to qualify for certain limits and offers.


What are some things to keep in mind when using credit cards?

Using credit cards can be a great way to help build your credit history and establish your financial stability. But it is important to remember that using credit cards comes with responsibility. Here are some key things to remember when using credit cards:


  1. Make sure you pay off your balance on time each month: Credit card companies will charge interest on any remaining balance at the end of the billing cycle. It can add up quickly, so it’s important to make sure that you pay off your balance every month to avoid extra fees. 
  2. Don’t overextend yourself: It can be tempting to buy something with a credit card, even if you don’t have the money to pay it upfront. But it’s important only to use your credit card when you can comfortably afford to pay the balance in full at the end of the month. 
  3. Check your statement regularly: You should review your monthly credit card statement to ensure there are no fraudulent charges or suspicious activity. Also, you can use it as an opportunity to ensure that all the charges are correct and up to date. 
  4. Read the terms and conditions of the credit card agreement: Before you sign up for a credit card, make sure you understand all of its terms and conditions. That way, you’ll know precisely what is expected from you and what fees or charges might apply. 
  5. Don’t close old accounts: Even if you don’t use a credit card anymore, keeping the account open is best. It will help keep your available credit high, resulting in a better credit score. 


By following these simple tips, you can ensure that you use your credit cards responsibly and avoid any unnecessary debt or fees. Always check your statement and read the terms and conditions before signing up for a new credit card.

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When choosing the right credit card in India, there are many factors to consider and a wide range of products available. In general, you should select a card that best fits your lifestyle and needs while at the same time offering the best rewards and benefits. A Gold or Premium card may be more suitable if you frequently travel, while a standard card is usually sufficient for regular day-to-day use. Regardless of what type of credit card you choose, always remember to pay off your balance each month, avoid carrying a high balance, and only spend within your means. 

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