What are the Different Types of Credit Cards Available Today?

Credit cards are gradually becoming one of the most popular financial tools in India. These offer several advantages to a cardholder. A user can make transactions without depleting his or her savings, has sufficient time to repay the credit, and can increase their creditworthiness by doing so.

Almost every financial institution, including NBFCs, offers credit cards to eligible applicants. Such organisations tie-up with service providers and offer various benefits to their customers. There are different types of credit cards tailor-made for different users and their unique requirements.

Credit cards can be divided into few categories depending on their features and intended use. These include –

  • Unsecured credit cards.

  • Balance transfer credit cards.

  • Secure credit card.

These feature-rich credit cards often come with several loyalty programs, complimentary services, discounts, bonuses, and several other features to entice their customers. Let’s take a look at the different credit cards available in the market today.

  1. Unsecured credit cards – These are the most common types of credit cards around. Such cards allow a cardholder to draw an advance from a pre-set line of credit and make transactions with it. The amount of credit utilised will have to be returned within a given due date, along with a certain amount of interest.

Unsecured credit cards often come with reward points program, interest-free grace periods, EMI option, and several other features and benefits. A customer can choose a credit card according to their financial requirements and spending patterns to earn lucrative returns while spending money.

Certain cards like Bajaj Finserv RBL Bank SuperCard also allow its users to withdraw money from ATMs (without paying any interest for up to 50 days) and take an emergency loan on the available credit limit. These features help the cardholder create stable financial backing to tackle an emergency.

Financial institutions also run loyalty programs like reward points and milestone bonuses. These are 2 of the most common types of add-on benefits on offer with ordinary unsecured credit cards. Reward point programs offer a certain number of redeemable points for every Rs. 100 spent on regular or online purchases. The cardholder can accumulate these points and redeem them at a later point of time for gift vouchers, discounts, cashbacks, etc. Proper utilisation of reward points can help the user save a significant amount of money on their daily purchases.

Milestone bonuses are offered to a credit card customer when they reach a certain milestone of transactions. These generally comprise a specific amount of reward points.

For example, companies like Bajaj Finserv disburse up to 20,000 reward points each time when a user reaches a spending milestone of Rs. 3,00,000 and Rs. 5,00,000 in a year. They also offer welcome bonuses, which is a part of the reward program where the credit card company offers up to 20,000 reward points when an individual signs up for a new card.

Bajaj Finserv also brings pre-approved offers on credit cards, personal loans, home loans, business loans, and several other financial products. Such offers not only simplify the process of availing finance, but it also helps save time. You only have to share some essential details online to check your pre-approved offer.

  1. Balance transfer credit cards – Balance transfer cards are a type of credit card that allow a cardholder to transfer existing dues to that credit account and pay accordingly. It is generally availed when someone has too many high-interest debts to repay. Balance transfer credit cards usually come with very low or 0% interest rates to help the borrower overcome the fiscal deficit.

  1. Secured credit cards – Secured credit cards are generally offered to applicants who don’t have the minimum recommended credit score to apply for an ordinary credit card. These cards are offered against a fixed deposit, which acts as collateral for its line of credit. The limit of the credit card generally stays within or less than that of the FDs total amount.

Secured credit cards are a great financial tool for individuals who want to improve their credit score. These types of credit cards also work overseas which make them a great alternative than carrying hard cash or a debit card.

The above mentioned variations are some of the most common and popular types of credit cards available today. Thanks to the large availability, any eligible applicant can choose amongst a wide array of different products and find a suitable financial tool for their unique requirement.

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