Synopsis: This article outlines the various types of credit cards that are available in India and highlights which card suits the users according to their needs.
The Indian credit card market is highly diversified and it caters to a wide spectrum of consumer financial needs. The financial entities issue cards structured around specific value propositions including benefits and payment network capabilities.
1. Cashback Credit Cards
The main feature of these cards are the direct return of a percentage of the amount spent to the cardholder’s account. This is ideal for consumers seeking tangible savings on everyday expenditure. Cashback percentages vary by card but typically range from 1% to 5%. Some examples of Cashback Credit Cards are cashback SBI card and HDFC Millenia Credit card.
Example: If a cashback credit card is providing 5% cashback on online shopping and 1% cashback on all other (offline) purchases then spending of ₹8,000 on Amazon and Flipkart will reward a cashback of 5% that is ₹400. And for the offline purchases of ₹5,000 will earn a cashback of ₹50.
2. Rewards/Points Credit Cards
Reward or points-based credit cards do not provide direct cash returns. In this type of card the cardholders earn points as they spend and can later redeem those for a variety of options. Some of the Rewards credit cards are HDFC Regalia Gold and SBI Prime.
Example: If you spend ₹10,000 on groceries (3 points per Rs. 100 = 300 points) and ₹5,000 dining (5 points per Rs. 100 = 250 points). Redeem 500 points for a Rs. 400 shopping voucher.
3. Premium & Lifestyle Credit Cards
These types of cards are typically offered to High Net Worth Individuals (HNIs) and have a strong credit report. The eligibility criteria for these cards are also set strictly thus only a number of people have access to these. Once you qualify for the card you can start to enjoy various luxury perks. Some examples of these cards are Axis Bank Burgundy Private Credit Card and ICICI Emerald Private Credit Card.
4. Travel & Airline Co-branded Credit Cards
As the name suggests – these cards cater specifically to frequent flyers. It offers accelerated air miles meaning the cardholder earns miles by taking flights with a particular airline or its partners. These air miles can be redeemed for various travel related services including discounts on future flights. Some of the popular Travel & Airline Co-branded Credit Cards are Air India SBI Signature Card and Marriott Bonvoy HDFC Bank Credit Card.
5. Shopping Credit Cards
These cards are specifically for those who are into shopping. These mostly come partnered with popular e-commerce platforms such as Amazon India or flipkart thus the discounts come handy. Shopping Credit Cards like Amazon Pay ICICI Bank Credit Card and Flipkart Axis Bank Credit Card are widely popular.
6. Fuel Credit Cards
These cards are useful for those who own vehicles and frequently use cards for fuel. One thing to keep in mind is that the benefits are most times exclusive and will only apply when used at associated petrol pumps. Some examples of popular fuel credit cards are BPCL SBI Card Octane and Indian Oil RBL Bank XTRA Credit Card.
7. Secured Credit Cards
These cards are aimed for those who have low credit scores or don’t have any credit score at all. It requires a refundable security deposit to open which typically becomes the credit limit. The timely repayments are reported to credit bureaus thus helping in building the credit score. ICICI Bank Coral Credit Card and Axis Bank ACE Credit Card are some examples of secured credit cards and may sometimes offer cashbacks upon purchases.
Example: If a cardholder deposits ₹25,000 as a fixed deposit (FD) with SBI – it typically sets a credit limit of up to 80% (around ₹20,000). And with on-time payments reported to bureaus it helps rebuild credit score.
8. Business/Corporate Credit Cards
These types of credit cards are tailored for organizations and are usually used for business activities that include flight booking. When compared to the other regular cards these corporate cards provide high value business-specific rewards and sometimes in airmiles too. Some of such cards are American Express’s Platinum Business Card and ICICI Bank Corporate Credit Card.
9. Student Credit Cards
These are catered for students and allow them to start maintaining their credit score on their own. These cards generally come with low credit limits and relaxed eligibility criteria. Student credit cards promote responsible usage through controlled spending and financial education. Some of the major student credit cards are SBI Student Plus Advantage Credit Card and cards like ICICI Bank Student Travel Card are designed for students studying abroad.
Also Read: Credit Card vs Debit Card: The Key Differences Every Consumer Should Know
10. Super Premium Credit Cards
These are invite-only credit cards which means the bank itself will reach out to the individual and offer the service. The net worth of the individuals needs to be ultra high to be eligible for this card. An example of this invite-only card is the American Express Centurion Card also known as The Black Card.
Conclusion
In conclusion, different credit cards are specific designs for various financial usage. Instead of having one single card for all purposes, banks provide precise cards for various uses.
Written by Kenbi Riba
