Credit Cards: All You Need to Know

Published on February 15, 2017

What is a credit card?

A credit card is a Payment card provided by a financial or entity or banks to an individual or a company. Credit cards validate the cardholder to pay for goods and services based on the holder's contract to the issuer to pay issuer entity for the amount pay and other agreed charges. Credit cards allow the holder a continuing balance of the debt, subjected to interest being charged, basically credit card involve a third party that pays the goods and services for the consumer and pay back by the consumer.
The credit card companies or issuer banks generate a revolving account and provide a line of credit to the user, from which the consumer borrow money for payment or as a cash.
Type of credit cards:
There are many banks and companies that provide a different type of credit cards. Customers can choose their suitable type of credit card according to their needs and help them to avail a lot of benefits.

The different categories of credit cards 

Classic Credit Cards:

There are lots of features in classic credit cards like interest-free credit period, cash advance, global acceptance, revolving credit, cash advance, supplementary cards, dedicated 24/7 customer care helpdesk for customers, rewards program. Classic credit cards are offered at low finance charges and there are no joining fees. Most of them do not carry any annual fees.

Gold Credit Cards:

Gold credit cards can be avail by any individuals who has a higher income from any bank of India. A good credit score must be needed to apply for a gold credit card.
The features of gold credit cards are - 
  • High cash withdrawal limit
  • High credit limit
  • Add on card facility for family member
  • Travel Insurance
  • Cash-back offers 
  • Rewards program.

Platinum Credit Cards

Platinum Cards are the most popular and used by many people. There are lots of benefits and privilege offered by these platinum cards and the benefits include lifestyle, dining, shopping, entertainment etc. Platinum credit cards carry annual, joining and renewal fee and those are little higher than any other credit cards available in the market.
The features of platinum credit cards are - 
  • Exceptional welcome package, gift vouchers
  • Cash-back offers
  • Easy cash withdrawal
  • Fuel surcharge waiver
  • Add on for family members
  • Exclusive privileges, deals and offers to depend on the card issuer company. 

Cash-back cards: 

Cash-back credit cards always avail a cash-back on their every transaction. This cash-back varies from 5%-20% depending on the spend amount and type. Any Cash-back card holder can earn a cash-back on bill payments, grocery purchase, movie ticket, dining bill etc.
The features of Cash-back cards are - 
  • fuel surcharge
  • Global acceptance 
  • Balance transfer
  • Rewards program
  • Annual fee renewal
  • Dining and shopping privilege.

Business Credit Cards: 

Business or Corporate credit cards are generally offered to business companies, corporates houses, or any other financial institute where the employer offer these cards to their employee. The employee cannot use these card for a personal transaction and valid only the period employment with the company. The owner of the credit card conveniently manage the finance of the credit and have the option of getting the name of the company embossed on these credit cards.
The features of Business credit cards are- Hotel accommodation and travel deals
  • Insurance
  • Fuel surcharge waivers
  • Airport lounge access, 
  • Rewards programs
  • Convert purchases into monthly installments.

Prepaid Credit Cards: 

Prepaid credit cards do not offer a line of credit. Cardholders have to load some amount of money in it to purchase by using that money. Even though the cardholder avails most of the privileges offered by the other types of credit cards. American express and Axis bank provide prepaid credit cards in India.

Silver Credit Cards: 

Silver credit cards avail by any individual who falls under the nominal salary range and has work experience of 4-5 years and more importantly has a good credit history. It is easy for a salaried employee to avail this kind of credit card. The membership fees for these credit cards are very low and no interest charged on fund transfer.

Entertainment Cards: 

Entertainment credit cards widely famous for its offers on entertainment packages. The privileges offered on Entertainment cards discounts, cash-back, offers on movie tickets, events, shows etc. offers lifestyle, dining, shopping, travel also avail by these types of cards. Customers can earn reward points and redeem them for other entertainment deals.

Titanium Credit Cards: 

Titanium Credit card is a premium credit card with lots of privileges and features.
The features of titanium credit cards are - 
  • Titanium rewards program. 
  • Cash-back offers.
  • Revolving credit.
  • Surcharge offers.
  • Insurance
  • Annual fee reversals
  • Interest-free credit period
  • Welcome gifts in the form of vouchers
  • Add-on card facility
  • Lifestyle and dining benefits

Travel Cards: 

Travel credit cards are known for their unlimited travel benefits offer. These cards offer travel benefits in India abroad. Most banks and other credit card companies have tied up with airline companies or travel companies to offer travel credit cards. Customers can earn air miles while using these cards to make a travel transaction. Apart from this, some travel credit cards provide access to airport lounges, the reward points earned by the customers can be converted to air miles and used to book flight tickets. Hotel and holiday offers, golf offers, dining offers, travel insurance are also availed by these cards.

Co-branded Credit Cards: 

Co-branded credit cards are provided by banks along with a retail brand, travel aggregator or any other financial institution. Co-branded credit card provided privileges from both parties and letting customers enjoy double benefits via one card. Privileges and features are depending on the tie-up. Co-branded credit cards can avail discounts and offer from a retail partner brand, offers on ticket booking from airline and railway associates, holiday and hotel accommodation from travel partners, Sporting offers from a sports league etc. The key feature of Co-branded credit cards is there is no restriction on the usage.

Contactless Credit Cards: 

Contactless credit cards have a unique payment technology. Cardholders just simply tapping their cards at POS terminals and make their payments there are no need to enter any PIN number to make a purchase. These contactless transactions are extremely secure. These cards provide lots of benefits like cash rewards, reward points, discounts, entertainment benefits, welcome gift, lounge access, concierge service, insurance policy, etc. SBI and ICICI bank provide Contactless Credit Cards in India.

Auto / Fuel Credit Cards: 

Fuel credit cards provided to car owners to offer benefits on every fuel transaction that cardholders make. This card providing cash back and fuel surcharge and helps customers on refueling, if they are made the purchase at specific petrol pumps across India. The rewards points earned by the customer can be redeemed for refueling for a predetermined value. Other privileges that come with any Fuel credit card are activation bonus, entertainment benefits, dining, hotel and wellness offers, etc.
The joining and annual fees charged are very low on these cards. A cardholder uses Auto credit cards as a travel card plus a normal credit card which can be used for any other purchases. These cards come with a welcome gift, a certain amount of preloaded cash and also equipped with an auto top-up facility. Some other features of these cards are renewal deals, add-on facility, rewards program.

Credit cards for Women: 

These cards exclusively design for women. These Cards mainly offer privileges on shopping, discounts and cash back benefits. Apart from this, cardholders also can avail various benefits like reward points, fuel surcharge etc.

Lifestyle Cards: 

Most of the lifestyle cards are platinum cards. Lifestyle Cards are designed to maintain changing lifestyle and income of the applicants. These cards generally carry golfing, shopping, travel, dining benefits. These cards come with a first-year annual fee waiver, insurance offers, discounts on tickets etc.

Balance transfer Credit Cards: 

Balance transfer is a facility which is offered by banks on most of the credit cards. Any credit card which is equipped with this facility can transfer outstanding funds to another credit card issued by any other bank. A nominal fee charged by banks for balance transfer. This processing charge is very reasonable.

Premium/Signature Credit Cards:

 These credit cards are offered by many banks. Signature credit cards have lots of privileges like flexible spending limits, premium lounge access, concierge services, insurance, rewards program, global acceptance, chartered yacht and flight services, surcharge waivers, retail, travel and hotel accommodation vouchers, etc.

Secured Credit Card: 

A cardholder’s deposit account is what secures the Secured credit card. Cardholder only spent preloaded money in the account and must be deposit between 100% and 200% of the total amount of credit desired

Rewards Cards: 

Rewards credit cards offer multiple rewards on every transaction. Cardholders can earn rewards points on all their card transactions. Welcome gift, birthday gift, renewal bonus can be earned by cardholders. They can earn a reward when they spend a certain amount in a specific period of time. Installments facility can be avail by these cards.
Credit cards are offered in collaboration with the following payment networks - Visa, MasterCard, American Express, Diner’s Club, etc.
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ramandeep singh

Ramandeep Singh is a seasoned educator and banking exam expert at BankExamsToday. With a passion for simplifying complex concepts, he has been instrumental in helping numerous aspirants achieve their banking career goals. His expertise and dedication make him a trusted guide in the journey to banking success.

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