Types of Credit Cards in India

February 23, 2023Last Updated: February 20, 2023

Credit cards have become an integral part of the modern-day financial landscape, providing consumers with an array of payment options and financial benefits. Credit cards allow you to borrow money from a bank or financial institution to make purchases and pay them back over time. In India, there are several types of credit cards available, each with its own set of benefits and features. This essay will discuss the various types of credit cards in India, their features, and their benefits.

Standard Credit Cards Standard credit cards are the most common type of credit cards in India. They are offered by various banks and financial institutions and provide consumers with a wide range of benefits, including reward points, cashback, and discounts on purchases. These credit cards have no specific eligibility criteria, making them easily accessible to most consumers. Standard credit cards generally come with a lower credit limit and higher interest rates than other types of credit cards.
Premium Credit Cards Premium credit cards are designed for individuals with high net worth and offer more exclusive benefits and services than standard credit cards. They generally come with a higher credit limit, lower interest rates, and an annual fee. Premium credit cards offer benefits such as concierge services, access to airport lounges, and exclusive deals on luxury brands. Some examples of premium credit cards in India include American Express Platinum Card, HDFC Infinia, and Standard Chartered Ultimate.
Co-branded Credit Cards Co-branded credit cards are issued in partnership with a specific brand or retailer, such as a hotel chain or airline. These credit cards offer rewards and benefits that are specific to the brand, such as free hotel stays or airline miles. Co-branded credit cards are popular among frequent travelers and shoppers. Some popular co-branded credit cards in India include the HDFC Bank Diners Club Black Card, SBI Card Air India Signature, and Citibank Premier Miles.
Cashback Credit Cards Cashback credit cards offer a certain percentage of cashback on purchases made with the card. The cashback can be credited to the cardholder’s account or redeemed for other rewards such as gift vouchers or air miles. Cashback credit cards are popular among consumers who want to earn rewards on everyday purchases. Some popular cashback credit cards in India include the ICICI Bank HPCL Platinum Credit Card, Standard Chartered Manhattan Platinum Credit Card, and HDFC Bank Regalia First Credit Card.
Travel Credit Cards Travel credit cards are designed for individuals who travel frequently and offer benefits such as airline miles, airport lounge access, and travel insurance. These credit cards may also offer discounts on hotel bookings and car rentals. Travel credit cards are popular among frequent travelers who want to earn rewards on travel-related expenses. Some popular travel credit cards in India include the Axis Bank Vistara Signature Credit Card, SBI Card Elite, and Citi PremierMiles Card.
Business Credit Cards Business credit cards are designed for business owners and offer benefits such as cashback on business expenses, expense tracking, and accounting tools. These credit cards may also offer higher credit limits and customized billing cycles. Business credit cards are popular among small business owners who want to keep their personal and business expenses separate. Some popular business credit cards in India include the HDFC Bank Business Regalia Credit Card, SBI Corporate Credit Card, and ICICI Bank Business Platinum Credit Card.
Secured Credit Cards Secured credit cards are designed for individuals with no or bad credit history. These credit cards require a security deposit that acts as collateral for the credit card. Secured credit cards offer a way for individuals to build or improve their credit score. Some popular secured credit cards in India include the SBI Card Unnati and ICICI Bank Instant Platinum Credit Card.

Credit cards have become an integral part of the modern-day financial landscape, providing consumers with an array of payment options and financial benefits. However, credit cards also come with their own set of advantages and disadvantages. In this essay, we will discuss the pros and cons of credit cards.

Pros:

Convenience: Credit cards offer unparalleled convenience. You can use them to make purchases both online and offline, and they can be used at almost any store.
Rewards: Credit cards offer rewards, such as cashback, reward points, and discounts, which can be redeemed for various benefits.
Build Credit Score: Using a credit card responsibly can help build a positive credit score, which can be useful when applying for loans, mortgages, or other financial products.
Fraud Protection: Credit cards offer fraud protection, and if someone makes an unauthorized purchase, the cardholder can dispute the transaction and have the charge removed from their account.
Emergency Funds: Credit cards can be useful in emergencies, such as unexpected expenses or car repairs, where immediate cash is required.

Cons:

Debt: Credit cards can be a slippery slope to debt, as they offer an easy way to spend money that you may not have. High-interest rates can lead to the accumulation of significant amounts of debt over time.
Overspending: Credit cards can lead to overspending, as the ease of use and rewards can make it tempting to spend more money than you can afford to pay back.
Fees: Credit cards may come with various fees, including annual fees, late payment fees, and balance transfer fees, which can add up quickly.
Credit Score Damage: Late payments, missed payments, or defaulting on credit card debt can damage your credit score, making it more challenging to get approved for loans, mortgages, or other financial products in the future.
Temptation to Use Credit: The ease of using a credit card can lead to over-reliance on credit, making it difficult to live within your means and save money.

In conclusion, credit cards can be a useful financial tool if used responsibly. They offer convenience, rewards, and fraud protection, but they also come with the potential for overspending, debt, and fees. It is essential to use credit cards wisely and pay off balances in full each month to avoid falling into a cycle of debt.

How to get credit cards

Getting a credit card in India is a straightforward process if you meet the eligibility criteria set by the bank or credit card issuer. Here are the steps to follow to get a credit card in India:

Check your credit score: The first step in getting a credit card is to check your credit score. Your credit score is a three-digit number that determines your creditworthiness. It is based on your credit history, including your credit card usage, loan repayments, and other financial obligations. A good credit score increases your chances of getting approved for a credit card and may also help you negotiate a better credit limit and interest rate.
Research credit cards: Once you have checked your credit score, research credit cards that match your financial needs and lifestyle. Look for credit cards with low fees, high rewards, and attractive interest rates. Check the eligibility criteria and documentation required for each credit card.
Apply for the credit card: After choosing the credit card that meets your needs, visit the bank’s website or a branch office to apply for the credit card. You can also apply for a credit card through the bank’s mobile app. Fill in the application form with accurate information, attach the required documents, and submit the application.
Documents required: To apply for a credit card in India, you will need to provide a copy of your identity proof, address proof, and income proof. Acceptable documents for identity proof include PAN card, Aadhar card, passport, or driving license. Acceptable documents for address proof include utility bills, rental agreement, or a recent bank statement. Income proof documents may include your salary slips, bank statement, or income tax return.
Wait for approval: After submitting your application, the bank will verify your details and review your credit score. The bank may also conduct a background check and may contact you for additional information. Once the bank approves your application, they will issue the credit card, and you can start using it.

In conclusion, getting a credit card in India is a simple process if you meet the eligibility criteria and provide the required documentation. It is important to use your credit card responsibly, pay your bills on time, and avoid overspending to maintain a good credit score and avoid falling into debt.