Credit needs may vary from one person to another and so does the requirement for a credit card. While you may need a credit card to conveniently pay all your utility and other bills on time, someone else may need it to make their airline and hotel bookings at discounted rates.
Different types of credit cards with different features are available in India. Some of these cater to the requirements of low-income group, while others are targeted at frequent flyers or shoppers, or fuel purchasers. You need to identify your credit requirements and then apply for a suitable card accordingly.
Types of Credit Cards
Some common categories of credit cards are:
·Travel Credit Cards: Highly suitable for frequent travellers, this category of credit cards offers uses a lot of benefits like lounge access at the airports, low foreign transaction fees, discounts on hotel bookings and car rental services.
So, if you travel quite often whether domestically or to foreign countries, you should compare credit cards and choose the one that offers you special deals on your travel-related expenses.
·Rewards Credit Cards: While all credit cards offer reward points on transactions carried through them, some cards offer accelerated points on certain expenses. In such cases, the reward points are a fraction of the amount spend and can be redeemed against specific items in the rewards catalogue of the bank.
Some cards offer extra reward points on transactions done on specific days like your birthdays or anniversary. Go for a credit card whose reward points have no expiry.
·Cashback Cards: These types of cards provide you cashback for some specific purchases. The cashback can be used as a statement credit or for shopping.
·Fuel and Entertainment Credit Cards: This variety of credit cards cater to the requirements of people who regularly buy fuel or go out for watching movies and theatre or for dinner. These cards provide some good discounts when you go out for buying fuel or having dinner. Accelerated rewards associated with such credit cards are quite beneficial.
·Secured Credit Cards: This category of credit cards is issued against the fixed deposits held by you. These cards allow you to earn interest on the fixed deposit amount while using it as collateral for the credit limit sanctioned to you.
Factors to Consider for Choosing a Credit Card
Here are some points that you should consider when you apply for a credit card:
·Identify Your Spending Pattern: If you are not a frequent traveller a travel card is of no use to you.And if you are a shopaholic, you may prefer to choose a card that offers attractive discounts on shopping or reward points that can be redeemed with good discounts at your favourite store.
·The Reason Why You Need a Credit Card- The reason for applying for a credit card is important. You may be wanting to build a good credit score and so should opt for a card that has zero annual free. Or you may be looking for a card with a personal accident or travel insurance cover. You may also be looking for a card that charges low interest rate.
Choose a card that offers you the maximum possible benefits and this is possible after you do adequate research and compare credit cards.
