In a world where you are constantly bombarded by choices, it is important to have some understanding of the important things to make the right decision. It is a similar case when it comes to credit cards. Every bank or credit card issuer offers different types of credit cards to users.
Even though credit cards have been in the market for quite some time, users still don’t understand how to make the most of it or which type of credit card they should choose for themselves. You might spend hours finding the right card for yourself and still not find something which makes sense for you. Therefore, you need a basic understanding of the types of credit cards in the market to understand the offerings and the benefits better.
This article will help you understand the same in a simple manner. Let’s get started.
Types of credit cards in India
Broadly speaking, credit cards are generally categorized into three different categories. They are as follows:
- Credit Building
- Low-Interest
- Rewards
These are basic categories. However, the market offering has diversified when it comes to credit cards. Therefore, new categories are added every day making the old ones irrelevant. We will discuss the most preferred credit card types in this blog.
Cashback Credit Cards
A cashback credit card as the name suggests mainly focuses on cash back as a benefit of the credit card. A cashback is providing a percentage of the amount spent by the user back in the form of cash.
For example:
Airtel Axis Bank offers 25% cash back on Airtel bills and recharges. So, if you have spent Rs. 500 on an Airtel recharge, you will get 25% of that amount back into your account.
Reward Credit Cards
Reward credit cards can help you accumulate reward points by spending a minimum sum of money on your credit card. The reward points can be converted to cash or can be used to buy listed products.
For example:
Spending of Rs. 100 can earn you 2 to 4 reward points. (The reward system differs for every reward point credit card)
Travel Credit Cards
When credit card companies/banks collaborate with travel partners and launch a card with travel-specific benefits, it is called a travel credit card. These cards can give users discounts on flight tickets, access to Airport lounges, offers on package or group trips, etc. The users can also accumulate reward points to book their next tickets for free or at discounted prices.
For example:
The Airtel Axis Bank Credit Card offers four free access to Airport Lounges in one calendar year.
Fuel Credit Cards
These credit cards are a result of collaboration between fuel companies and banks. They either provide fuel points or cashback on credit spent on getting fuel for your vehicle(s).
Co-branded Credit Cards
Many banks partner with online shopping platforms or telecom companies etc., to offer a credit card with unique benefits. Such cards are referred to as co-branded credit cards. The Airtel Axis Credit Card is one such example of a good co-branded credit card.
These are just a few types of credit cards available in the Indian market. Once you understand their usage, you can observe your needs and purchase patterns to find the right fit for yourself. Also, if you want to know about how to withdraw cash from credit card, then Airtel has you covered on that front too!