In 2022, around 73 million credit cards were issued in India, and this number is expected to grow to 200 million by 2026. With the various benefits and rewards that credit cards provide, their popularity has grown immensely in recent years. Many e-commerce companies typically give fantastic discounts when a transaction is made with a specific credit card, making it an alluring offer for customers to consider getting that card and get maximum offers.
The credit card industry will see growth this year from several intriguing trends, including Buy Now, Pay Later and cryptocurrency credit cards. There are so many credit cards and so many payment options that it is evident that the industry is becoming more personalized and bringing in more options for everyday customers.
Every individual has a specific need, and that specific need can be fulfilled with a credit card. This can greatly help in getting better offers, rewards, and cashback, making financial transactions more fun.
Out of many card options out there, here are a few of the most common yet significant types of credit cards that one should know about.
A business credit card permits businesses (small corporations or solopreneurs) to make purchases, track costs, and control cash flow for expenses like flight ticket booking, expenditure on office supplies, telecommunications, and so on. Business credit cards often include features that are tailor-made for corporate use, such as associated monitoring tools, customizable spending limits for each employee/ department, and rewards that align with lowering business costs. These cards can help separate personal and business expenditures, simplifying accounting and tax-related duties for a business.
The process for acquiring a business credit card may require records about the enterprise, like its financial history and the private credit score of the key stakeholders or management. Some cards may also require a certain level of revenue information or business age for the application to qualify. Business credit cards can usually be used internationally, making them appropriate for corporate travelers and organizations engaged in global business models.
A student credit card serves as a monetary device to assist students in building a credit score and controlling their finances and expenses. Student credit cards often include lower credit limits. These cards may additionally offer rewards or cashback suitable for students who usually spend on some common items/ activities. This can include getting discounts on textbooks, online subscriptions, or eating out.
Obtaining a student credit card is usually a simpler process and doesn’t involve any credit score checks from the issuer. However, students need to provide proof of their enrollment in an educational institute and a cosigner, like a guardian or parent. Many student credit cards can be used internationally, making them suitable for college kids who may go abroad as exchange students or for college trips.
A rewards credit card is a great option for those who like to spend on different activities throughout the year. These kinds of cards offer lucrative rewards in terms of miles, memberships, or cashback for spending money on different businesses. Every reward credit card has a set number of industries where desired rewards can be obtained or expected. For example, a rewards credit card can offer a particular number of airport lounge access in a particular period, provide cashback on fuel stations, and enable getting some gift cards from co-partnered brands. These cards are ideal for people who use their credit cards to a greater extent, as then and only then does it make sense to purchase them in order to get the maximum benefit out of them.
These kinds of cards can be available for free or at a nominal fee if the rewards offered/ opted-for are greater and bigger than those available in free models. Based on your credit score, spending history, etc., the application for these cards is approved. These cards are ideal for personal use and can even work internationally but do check the terms and conditions before for full clarity.
These types of credit cards are similar to rewards credit cards, but in this case, the rewards are a small percentage of the spent amount in the form of cashback, a tangible outcome in real-time. This kind of credit card generally offers a sincere and tangible advantage, allowing customers to earn cash rebates on their regular purchases. Cashback credit cards have varying reward prices for different kinds of spending, be it groceries, fuel, or dining.
Getting a cashback credit card might require the details of the applicant’s credit history. The primary advantage of a cashback credit card is the simplicity and flexibility of the rewards. Cardholders earn a percentage of their spending returned in cash, which may be easily redeemed as per the policy and terms and conditions. Cashback credit cards are generally designed for personal use. Many cashback credit cards are suitable for international use as they can help in getting higher or better cashback on international purchases or spending.
A co-branded credit card is a partnership between a credit card provider and a particular e-commerce/ industry-specific brand, like the ICICI Amazon Pay Credit Card. These cards have the logos of both organizations, and the rewards can revolve around the services of either brand. These rewards can consist of discounts, loyalty points, or specialized perks related to the partnering brand.
Obtaining a co-branded credit card commonly involves applying through the credit card issuer’s website or the partnering brands’ platform. They are generally designed for personal use and are a great choice for individuals who are frequent buyers of the associated brand. These cards can work internationally, but it is wise to understand the terms and conditions of the card to understand which regions are exempted and which are not.
Available for both domestic and international travel, travel credit cards are ideal for people who travel regularly. These cards offer several associated benefits, which can make traveling a bit less expensive or cumbersome. Travel credit cards often include functions such as tour coverage, airport lounge access, and the potential to earn points or miles that may be redeemed later for booking flights, hotel stays, or different tour-associated costs like insurance.
Travel credit cards are normally designed for personal use. They are perfect for individuals who travel often for amusement or corporate purposes. Many travel credit cards also provide great rewards for international spending, making them valuable for individuals who use them efficiently and effectively.
Secured credit cards are an altogether different concept of credit cards where the cardholder needs to submit a deposit to get their card. The credit restriction is typically the same as or a percent of the deposited amount. Secured credit cards are recommended for individuals with negative credit score histories, as they offer a way to construct or rebuild credit scores.
The application procedure is generally easier than for standard cards, making secured credit playing cards a possible option for individuals with lower credit rankings. Secured credit cards are normally intended for personal use. Many secured credit cards can be used across the world; however, it’s important to test the card’s terms and conditions concerning foreign transaction fees.
Credit card selection is more of a subjective process because of which there are so many options available in the market. At Verinite, we help financial institutions design and execute a successful credit card program. Our consulting is tailored to your needs, allowing us to use our expertise to form products that are suitable for your business model. Get in touch with us to learn more.