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Top 5 Types of Credit cards

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Before the coronavirus pandemic, the Indian credit card industry was growing at an annual rate of 25-30 percent but the usage declined amidst the crisis. Taking heed from the pandemic and targeting the premium customers, banks are now looking forward enhance their portfolios. With hundreds of Credit cards available in the market, it really gets very confusing to choose the best according to one’s need. Whether you’re a traveler or shopping freak the credit card companies got you covered with the latest offers and benefits. In today’s article we’ll be discussing the top 5 credit cards in India 2021 to choose from so let’s begin.

Lifestyle Credit cards

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So the first card that we’ll be discussing will be a lifestyle credit card which is by far the most procured credit card in India. It provides lots of perks and benefits to the users in shopping, travel, clubbing, online purchases, and movie ticket bookings. Nearly 80% of cards issued by the banks in India are lifestyle cards. They are created to fit the needs of individuals keeping in mind the needs of rising income and lifestyle changes. These cards also give access to luxury lifestyle privileges and privileges like select restaurants as well as discounts on travel. There are higher rewards on shopping and travel bookings.

Cashback Credit Cards

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Now I don’t need you to explain what exactly is a cashback right? Sometimes this is primarily the reason for overspending by retail customers Cashback credit cards offer a certain percentage of the purchase amount as cashback whenever you make a transaction with the card. The credit card companies may specifically mention which products cashback is applicable. To make you thing clear in a polished manner I’m sharing Snapshot of how customers avail this facility;

Now I want you to focus on bottom of the snapshot. Its clearly mentioned the customers will get cashback offer if the purchase is made by specified Credit Card. Now this is why you should opt for cashback credit cards if you are super crazy for online shopping.

Entertainment Credit Cards

The GenZ likes clubbing on weekends and loves online shopping so one can actually earn lots of rewards if he/she is spending a lot on entertainment activities. Understanding the need for this comes Entertainment credit cards. As the name suggests these Credit cards that provide discounts and offers on entertainment-related spending like movie ticket purchase, concert ticket purchase,  your favorite stand up comedy show, amusement park ticket purchase, and other events.

Premium Credit Cards

These cards are often viewed as a status symbol, premium cards are only offered to high-earning big spenders. Usually, it is opted by HNIs or individuals having a strong financial background. Premium cards have a high credit limit and a number of perks that are difficult, or expensive, to find elsewhere. It provides free access to golf clubs, airport lounges, generous rewards schemes, and insurance. It may also come with complimentary travel and hotel accommodation coupons. Not everyone can get approval to own this card for example in most cases you need to maintain a good Cibil score. Usually, the interest charges are quite high and you need to pay a hefty annual fee as compared to other cards.

Student Credit Cards

Nowadays most college students are burdened with financial obligations. To solve this problem we have Student credit cards it helps them to manage their funds in a better manner plus ensures that young and nascent professionals in building good financial habits from a young age.

The primary users of this category of cards are college students. The card considers the fact that students do not have a stable income source thus interest charges are negligible. In order to prevent students from falling into a debt trap, the student credit card has a low credit limit of up to Rs.15,000 as compared to other cards and is valid for 5 years. The approval for a student credit card has fewer criteria to be satisfied as compared to the other full-fledged cards.

These were the top 5 credit cards that are in use in India 2021. There are a lot of other cards available depending upon the usage and lifestyle of the customers. But make sure you read all terms and conditions associated with the credit card you opt for till then stay tuned!

Credit Cards

How to choose the best credit card for you?

“If you don’t have the money management skills yet, using a debit card will ensure you don’t overspend and rack up debt on a credit card – T. Harv Eker”

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Credit cards are widely used nowadays due to the benefits and flexibility it offers. You actually don’t need to carry a lot of cash if you want to make a big-ticket purchase let’s say an expensive car or maybe gadgets from your favorite tech store. With hundreds of companies offering various credit cards in Indian markets, most people get confused in selecting one with the best facilities.

In today’s article we’ll talking about the best credit card companies in India that offers the best deal that too a lowest interest charges so let’s begin

But, before moving on to the credit card companies let us first understand what exactly is a credit card.

“A Credit card is nothing but a little plastic card having a magnetic strip, issued by a bank or business authorizing the holder to buy goods or services on credit. It gives customers a pre-set credit limit which he can use to pay for their purchases without having to pay in cash or issuing a cheque. Instead of giving you the full loan in cash, the bank lets you take as much of the credit limit as you want at a given time. This limit varies from borrower to borrower and is influenced by financial status”

Now to decide which credit card is best for you we’ll look on to different parameters so as to come to a decision.

  1. Your spending habits and lifestyle

As I mentioned earlier using a credit card is just like you’re borrowing an amount that is needed to be repaid in the next month so if you’re a shopping freak and occasionally spend a lot of money then going for credit cards offering reward points and offers is the best choice for you but on the other hand, if you’re opting for credit cards in case of emergency of funds then go for cards that have the lowest interest charges and annual fees.

There are various types of credit cards that are issued by financial institutions which includes ;

  • Travel rewards credit cards, Airline and Hotel credit cards, Flexible rewards Premium credit cards, Cash back credit cards, Balance transfer credit cards, Student credit cards.

In upcoming articles we’ll be discussing about each one of them in a brief manner.

  • On boarding Incentives and bonus

In order to attract more customers banks usually offer zero processing charges, joining fees . But keep in mind the more luxury and benefits the card offers the more charges you need to incur.

  • Credit limit

The credit limit is nothing but the amount that your banks allow you to withdraw as a loan or this is the amount of money that the credit card issuer is willing to let you borrow. Depending on your credit history and credit score this can vary a lot. But make sure you never over withdraw the prescribed limit since it attracts penalty and can have a bad effect on your credit score.

  • Transaction charges and fees

If you are opting for credit card for first time make sure you look for the following charges mentioned below

  • Late Payment Fees
  • Cash Advance Fees
  • Rate of Interest Charged on the Balance Amount
  • GST
  • Foreign Currency Mark-up Fees
  • Cash Withdrawal Charges
  • Mobile Alert Charges
  • Balance Enquiry Charges
  • Duplicate Statement Charges

Make sure you have all the knowledge of all the charges levied so that you are not surprised if you are charged with high fees and interest. After viewing all the offers and charges you must see all the terms and conditions related to those offers.

  • Credit cards and Cibil score

If you want to improve your chances of getting loans in the future as that primarily depends upon your credit score you can use credit cards, pay your bills and EMIs that will results in an improvement in your credit score Individuals with a  decent CIBIL Score just use the card to increase it.

Conclusion

I’m pretty much sure now you know all the prior information that you need to look at before applying for a credit card. Choose the one according to your lifestyle like if you’re into traveling then traveling credit cards might be the one for you. Though it is not advised to use a credit card frequently since it has bad influence on your credit score but choosing the one with lowest charges, no hidden cost and that offers good discounts and benefits is best for you.

Credit Cards

What are credit cards and how can you use them effectively?

“Credit cards are like little plastic grenades that are needed to be handled carefully”

What are credit cards and how can you use them effectively?

Nowadays whenever you buy some item online all the E-commerce platforms provide you the facility to pay through Credit cards and some even provide certain lucrative offers like Cashback offers, No cost EMI facility, discount offers if you pay for the item through their partnered bank credit card. Credit cards are considered to be the easiest way of procuring credit if you are having a sound financial background and plus they provide ease and comfort for various day to day transactions like medical bills, grocery shopping, school fees repayment, and many more without involving currency notes and through digital platforms and that too if you don’t have money at that point of time. In laymen’s terms whenever you swipe your credit card it becomes a debt for you to be paid the very next month.

In today’s article we’ll be talking about what exactly is a credit card and how effectively you can manage it so that it does not affect you financial health so let’s begin

What are Credit Cards?

It is a little plastic card having a magnetic strip, issued by a bank or business authorizing the holder to buy goods or services on credit. It gives  customers a pre-set credit limit which he can use to pay for his purchases without having to pay in cash or issuing a cheque. Let’s say you swipe your credit card for monthly grocery purchases your account accrues a balance that must be paid off each month that is you need to pay that amount next month.

Okay I understand it didn’t make much sense so let me make you clear this way

“Instead of giving you the full loan in cash, the bank lets you take as much of the credit limit as you want at a given time. This limit vary borrower to borrower and influenced by financial status. Now As you pay off what you’ve borrowed, you can borrow again”

Eligibility criteria for credit cards?

You just need to make sure you fulfil  all the below mentioned criteria before applying for your first credit card

  • Your Age should be within 25 to 65 years.
  • You should have a cibil score of not less than 750. Now to understand what exactly is cibil score and how you can improve it you can check our previous article by clicking here
  • Your nationality proof like voting card or maybe driving license confirming your residential address which must fall within the SuperCard live locations in the country.
  • Applicants must also be an existing customer of the registered bank.

 Usually the older and financially stable you are higher are the chances that you’ll end up availing credit card facility. For lenders it assures less chances of defaulting as users possess a stable source of income and can meet the minimum salary requirements easily.

How you can apply for a credit card?

  • The most convenient and easiest way to apply for credit card is by applying online on the website of the bank.
  • By getting in touch with your relationship manager of the bank’s Branch.
  • Or visiting your nearest bank branch.

I’ll illustrate the whole procedure of what follows after you apply for a credit card and the bank/financial Institution receive your application

  • Step 1

In the very first step the user apply to banks by any of the means mentioned above

  • Step 2

After receiving your application the banks forward all your details to CIBIL and checks with all your details like past credit history, defaults, past repayments etc.

  • Step 3

CIBIL prepares a CIR(credit information report) and revert your Credit score and details  to the Bank.

  • Step 4

The banks confirms the report and after due diligence communicates to you whether your application was approved or not.

This whole process usually takes 10-15 days and if your application gets approved then it’s party time but to make sure you use your credit card in a wise manner I’ve listed few precautions you need to maintain whole using credit cards in next section of this article.

How to ensure you use credit card in a right manner?

  • NEVER EVER compromise your card details it can put you in great trouble. Be careful when handing over your card at a merchant outlet, especially at petrol pumps or makeshift establishments or maybe at your nearest grocery store.
  •  Make all your payments on time. In order to maintain good Credit score ensure that you do not have any outstanding bills and dues and if any ensure that you pay them instantly
  • You shouldWithdraw less cash from ATMs as credit card companies charge amount as high as 2.5% of the amount withdrawn.
  •  As I mentioned in earlier part of article most credit card companies and websites encourages you to use credit cards for purchases by offering you offering reward points/ discount / Cashback offers.
  • While it sounds enticing, don’t spend only to earn points.

Conclusion

While credit card is a boon in situations of emergency and provides ease in transacting your favourite item you need to make sure that you spend keeping in mind that this is debt that is needed to be paid at any cost. Like I said credit is like heat small amounts of it provides light on the other hand high credit can be like fire disastrous for your financial health.

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