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Want to know more about different types of credit cards in India?
Surely you would. It is very important to know about every detail before applying for a credit card.
Over 900 million valid credit cards issued by various banks in India are currently in active usage, according to statistics from Reserve Bank of India and other sources, released in January 2019.
Projections are, this figure will almost triple in by 2022 as India moves towards becoming a cashless economy.
These figures are nothing unusual if you look at the amazing variety and types of credit cards in India that are issued by the Public Sector Undertaking (PSU), private, cooperative and foreign banks.
Whether you are student or professional, homemaker or businesswoman, it is very easy to get a credit card in India. Moreover, you can apply and get a credit card that meets your specific needs.
Then read more about these amazing types of credit cards in India that you can apply for. The names or brands of some credit cards may vary. However, they will provide almost similar benefits, terms and conditions.
Types of Credit Cards in India:
In India, there is an amazing array of credit cards you can choose from. Each type of credit card in India is issued to a holder on various criteria.
Major Credit Card Issuers in India:
There are five major credit card issuers in India. Generally, your bank will issue a credit card from any of these five brands.
- Visa International: Most banks in India will issue a Visa-branded credit card. Visa is accepted by over 38 million merchants worldwide.
- MasterCard: Almost every bank in India offers MasterCard credit cards. A MasterCard can be used at over 38 million merchants around the world.
- Diners Club: This was the first credit card to be issued in India, in the mid-1970s. However, Diners Club cards are issued by select banks only.
- American Express: American Express, also called Amex is a top brand of credit cards internationally. You can get an Amex card from mainly from private Indian banks or directly from American Express India. Using an Amex credit card may not be possible at several locations in India.
- RuPay: Just in case you are unaware, India’s homegrown brand of financial services, RuPay, also issues credit cards. Currently, they are available only from State Bank of India. RuPay is a brand launched by the Indian government and the National Payments Corporation of India. It is valid in India only with plans to extend usage worldwide.
Categories of Credit Cards
Generally, there are various categories of credit cards that banks issue.
Factors including your age, educational qualifications, profession, income and location as well as credit scores are taken into consideration before a bank decides whether or not to issue a credit card.
And if it does, which category of card you are eligible for. Here are some broad categories of credit cards in India.
- Classic: These are entry-level credit cards issued by banks to persons with good credit scores. A Classic credit card is usually issued to a person with minimum qualifying income.
- Silver: A Silver credit card is usually given to first time applicants. They entitle the holder to a credit limit worth one or two-month monthly salary only.
- Gold: This type of credit card is the most common. It will usually be available as an upgrade of the Classic or Silver credit card, provided the user has solid spending and impeccable repayment history. Gold credit cards are very common in India.
- Titanium: Titanium credit cards are usually issued to persons with higher income and good credit score. They come with a slew of benefits such as loyalty points on every spending and complimentary accident insurance, among others. Usually, the brand ‘Titanium’ credit card is used by MasterCard.
- Platinum: There is not much difference between a Titanium and Platinum credit card. Usually, the only difference would be additional benefits and a higher credit limit. A ‘Platinum’ credit card is a brand from Visa International.
- Invitation Only Cards: Usually, ‘invitation only cards’ are very exclusive. You cannot apply for them: instead, the bank or issuer has to invite you to avail the card. Invitation only cards come with very high annual membership fee like Rs.200,000 and one-off membership of Rs.250,000 among others. They are strictly for high net worth individuals and offer several exclusive benefits.
Here, it is worth remembering, the bank or issuer will decide on the type of card you can get.
Also, the branding like ‘Silver’, ‘Gold’, ‘Platinum’ differs according to the issuer or bank. Therefore, the credit card you hold does not actually reflect your income or financial status.
Only ‘Invitation Only’ cards are a genuine reflection of a person’s financial standing since they are available to very high net worth individuals such as businessmen and industrialists.
Add-On or Supplementary Credit Cards
Very often, a bank or issuer can offer you something called Add-On or Supplementary credit card. An Add-On or Supplementary credit card is usually for your closest family members, especially spouse and children above 12 years of age.
An Add-On or Supplementary credit card does not have its own, independent credit limit. Instead, it shares your credit limit with your spouse and kids.
In simple words, when your spouse or child spends on an Add-On or Supplementary credit card, the money is debited from your credit limit.
The primary cardholder is responsible for all expenses made on an Add-On or Supplementary credit card issued to the spouse and children.
Add-On or Supplementary credit cards also pack the same benefits that you get as the primary holder.
For example, loyalty points for spending on an Add-On or Supplementary credit card will be credited to your account only.
Some banks offer complimentary group accident insurance to holders of Add-On or Supplementary cards.
Specific Benefit Credit Cards
As I mention earlier, banks and issuing companies in India offer customized solutions for their credit card members.
If you are looking at specific benefits from your credit card, here are some types that you may consider.
- Fuel Credit Cards: With gasoline prices on the upswing, fuel credit cards are growing very popular among vehicle owners in India. They allow you to get some discount at petrol stations.
- Travel Credit Cards: Airlines and above all, Indian Railways, have excellent cobranded credit cards that offer a slew of benefits for frequent travellers. If you wish to save on travel expenses or enjoy related benefits, apply for a travel credit card.
- Shopping Credit Cards: Understandably, you can shop with any credit card. But if you wish to stretch your spending and get maximum from every Rupee, apply for cashback credit cards. The issuer gives you points for every Rupee you spend. These points are worth cash.
- Cobranded credit cards: These are credit cards that are issued by banks with a particular brand or company. They allow you to save a lot of money while making purchases online or offline
- Lifestyle Credit Cards: Usually, a lifestyle credit card is for upmarket clients. Privileges include discounts on air travel, rebates at expensive restaurants and hotels, fitness clubs and boutiques.
- Entertainment Credit Cards: If you are a movie fan and love dining out, opt for an entertainment credit card. It allows you to save on movie and entertainment tickets and offers hefty discounts on dining.
- Contactless Credit Card: Very few banks in India currently offer a contactless credit card. A contactless credit card allows you to on a Point of Sale (POS) machine. All you need to do is wave your card before the machine.
- Credit Cards by Profession: This is the latest trend in India. Some banks now offer special credit cards for customers from various professions such as doctors and teachers. Following an Indian government directive, special credit cards are also available now to farmers, to help buy seeds, fertilizers and other essentials.
- Student Credit Cards: Nowadays, even college students can get credit cards. In some cases, your parents may have to keep a fixed deposit with the bank as collateral for your credit card.
- Partnership Credit Cards: A lot of banks do not have their own credit cards. Hence, they offer partnership credit cards. This means, your bank will have an agreement with another one that issues a credit card. The credit card itself will bear names and logos of both banks.
- Domestic Credit Cards: Normally, domestic credit cards are issued for people who will not travel abroad. They are valid in India and sometimes in Nepal and Bhutan too. You can make online purchases within India with these domestic credit cards.
- International Credit Cards: As the term implies, international credit cards can be used in India and worldwide. These are the most common type of credit cards issued by banks. You can use them in any foreign currency. Charges will be converted into Indian Rupees. You also have to pay an extra fee for international usage.
- Invitation Only Cards: These credit cards are available on invitation only, as I explain earlier. They are for very high net worth individuals. They offer a wholly exclusive range of benefits that are needed for the extremely wealthy individual.
Cloned Credit Cards: Growing Threat
Regardless of which type of credit card you hold, take every step to ensure its safety.
Never disclose Personal Identification Number and other details to unknown persons. This is because cloned credit card crimes in India are on the rise.
Sadly, India ranks among the top five countries with credit card fraud. Also, beware of persons offering you a cloned credit card for a small fee. It is illegal to possess and own a cloned credit card.
You can get into some very serious trouble with the law for possessing or using a cloned credit card.
Further, online thefts of credit card details are also on the rise in India. Point of Sale machines is also not quite safe.
Now that you are aware of different types of credit cards in India, it is possible to make the best choice while applying for one.
Also, if you are hoping to get more benefits from your credit card, you can select one that offers the best solutions.
Credit cards are excellent to have provided you can use them with prudence. Else, having a credit card with unpaid dues can land you in serious financial doldrums and severely damage a credit score.