Although dominated by debit cards, India is now accelerating the percolation of credit cards as a result of the shift to formal credit and the rising interest in India among international financial institutions to invest. Credit cards are mostly used to make domestic and international purchases of goods and services, but they can also be used to withdraw cash from an ATM and transfer money between banks.
According to figures from the Reserve Bank of India, 62 million credit cards were issued in March 2021, representing a 20% compound annual growth rate (CAGR). During FY 2022, credit card issuance rose by 15%. However, the top six issuers in the nation account for 80% of the credit card market. The credit card business is also anticipated to grow at approximately three times the rate in the following four years as a result of current and prospective innovations in the sector. In this context, it becomes important for us to know about different types of credit cards.
Here is a look at the several categories of credit cards that are offered on the market, along with their essential qualities.
Credit cards with cashback
A cashback credit card gives you cashback in exchange for a portion of the money you spend using the card. This method of doing business is quite simple. Credit cards with cashback come in two varieties- Credit cards that offer the same cash back on every purchase and cards that offer various cashback on various product categories.
Life Time Free Credit Cards
Users of lifetime free credit cards are not required to pay an annual fee and are typically not assessed a signup fee. On every purchase made using one of these credit cards, one receives cash back or reward points. Companies may provide lifelong free credit cards to customers as a self-promotional tool.
Credit Cards With brand sponsorship
To make it easier to shop from a specific shopping website, many Indian banks have issued credit cards in collaboration with well-known online retailers. Customers can receive good discounts while making purchases from these websites, and in turn, these websites are able to cultivate a following of devoted clients. For instance, banks and oil firms have joined to introduce credit cards that offer points or rewards for buying fuel from these businesses.
Credit Cards with Reward Points
These credit cards offer reward points when a certain amount is spent on them all at once. Depending on how the reward points are used, these credit cards come in three different varieties. For instance, the majority of businesses offer two or four reward points for every INR 100 spent. In India, this sum often hovers around a hundred. When reward points can be redeemed for cash, the value of such points varies from card to card and typically ranges from INR 1 to INR 0.25.
In other options, customers can collect reward points and buy the listed items from the provider’s or partner companies’ websites.
Credit Cards For Travel
To help those who want to take vacations or travel regularly, some banks have partnered with travel agencies to issue cards. These cards provide users reward points when they buy tickets or reserve travel packages, and the reward points they accumulate can be redeemed for additional travel accommodations or airline tickets.
Fuel Credit Cards
Oil firms and banks working together led to the creation of fuel credit cards. On fuel purchases made at any gas station operated by the partner companies, they offer fuel points or cash back. When customers want to use reward points, they cannot purchase the same amount of fuel at the gas station operated by a partner company. Only the gasoline pumps owned by our partners offer this feature.
High-End Credit Cards
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Premium credit cards are pricey credit cards that prioritise user satisfaction. They offer benefits including access to golf courses, unlimited use of airport lounges, food discounts, access to medical facilities, and special rates on booking flights, among others. These credit cards can cost up to ten times as much as regular credit cards. In terms of comfort and luxury, they may stand apart from others. Although there is some focus on reward points, the main area of focus is on luxuries.
Credit Cards with Lines of Credit
The primary benefit of these credit cards is their credit line, which functions as a kind of pre-approved loan that can be used whenever necessary from an ATM without any paperwork or security.
There are some credit cards that have interest-free periods of around 50 days. If the money is repaid before that time, there will be no interest charged on the borrowed amount, but if it is not, it will be treated as a loan. Other from the ability to borrow, these cards don’t have any other noteworthy features.
To sum up
Users must make sure they have a comprehensive understanding of the interest rates or other fees that apply to the purchase and usage of their credit cards.
The best approach to understand more about what your credit card option has to offer, the cost of the ask, and the rules and regulations that users must follow is to conduct a complete web search.