There are a myriad of credit card types, and the right information will only arm you intelligently for a smart choice in terms of choosing the right credit card for your purposes. Let me group and describe for you the most common types of credit cards and what you can expect from them.
Why Credit Card Types Matter
Credit cards differ and have some special feature that distinguishes one from another, focusing on the needs and spending habits of users. Once you identify the type of credit card, you will be able to choose the perfect card that maximizes your rewards and matches your financial plan.
Standard Credit Cards
The most basic form is the standard credit card. It provides a user with the ability to borrow up to a certain amount so that he or she can make purchases, which then have to be repaid with interest if they are not paid off within the billing cycle. They are no-frill but a great choice for first-time credit users.
Rewards Credit Cards
Reward credit cards give you the incentive to spend. Each time you use your card, you accumulate points, cashback, or miles you can redeem to get various rewards. A travel enthusiast, for example, may come across a card that gives airline miles per dollar spent, and he is able to save up for his next travel escapade.
Did you know that in India, the number of credit cards in circulation crossed the 75 million mark in 2023? This surge highlights the growing acceptance and reliance on credit cards among consumers for both convenience and rewards.
Secured Credit Cards
Secured credit cards are the best for those wanting to establish or rebuild their credit. These cards require a cash deposit as some sort of collateral from you, mostly used as your credit limit. This is their risky situation and makes the cards a stepping stone for people who may have a limited credit history.
Student Credit Cards
Student Credit Cards: These are for young adults starting to use credit. The advantages include relatively small credits and fewer fees, so that the credit card is more manageable. For instance, a student studying in Mumbai may use a student credit card to start creating his/her credit score while managing monthly expenses.
Business Credit Cards
Offers for Business Cards There are business cards for entrepreneurs as well as small business operators. They typically come with greater credit limits and business-related benefits, including the rewards on office supplies and travel. A small café owner may enjoy a business credit card because of the rewards she gets on ingredients and supplies purchased for the shop.
Meet Neha: Creating Her Credit
Let’s get acquainted with Neha, a Pune-based young professional, and discover how she built up her credit. Immediately, after graduation, she applied for a student credit card to cover the small expenses each month and created her credit history. She learned how to manage credit as well as how to get rewarded which would help in paying for a weekend trip with friends when using this card. This is an example of beginning with the right kind of credit card that would put you on the right track.
Familiarize yourself with the various credit card types so that you can choose the best one which would signify your existing lifestyle as well as financial goals. Maybe you need to find a card that brings in rewards for you, or perhaps you have reached that stage in life where managing business expenses has become an essential goal. Take time to get to know these credit cards and make that informed choice that will make all the difference in your financial journey!
