There was a time when you didn’t have many options, and certainly not the requisite knowledge while applying for a credit card in India. However, things have certainly changed over the past decade or so. This transformation went into overdrive during the demonetization period when the Indian government made certain bank notes redundant. It was also during this period that the Indian government along with the Reserve Bank of India encouraged the Indian consumers to go digital and embrace this inevitable move towards digitalization. Payments through e-wallets and plastic cards were encouraged, and financial institutions made it rather easy and convenient to apply for a credit card.
This brings us to today, as the number of credit cards in circulation has more than doubled over the past 6 years. We have more options today than ever before, and consumers have the luxury of picking and choosing the credit card that offers them the most benefits. There is no dearth of options, as most banks and NBFCs offer credit cards that come with unique features and advantages. It is imperative that you know about the different types of credit cards available in India today, along with their eligibility criteria.
Types of credit cards in India
Travel credit cards
If you are a frequent traveler, you would be better off opting for a travel credit card. Travel cards enable you to avail discounts on ticket bookings, whether it is by flight, train, bus, or taxi. Additionally, you also get reward points every time you make a purchase, and this can be redeemed later to earn air miles. Travel credit cards also offer discounts and benefits on future ticket bookings, while providing complimentary VIP lounge access at airports.
Rewards credit cards
These credit cards are geared towards consumers that want accelerated reward points on various purchases. Cardholders will be able to redeem the bonus points to get attractive discounts and to reduce their spending on items that they purchase in the future.
Fuel credit cards
If you drive long distances every day, either to get to work or if you own a cab service, then you should be looking for a fuel credit card. As the prices of petrol and diesel continue to sky-rocket, fuel credit cards offer fuel surcharge waivers, while also offering reward points on the amount you spend at gas stations and petrol pumps on fuel. These cards enable you to save a significant amount annually while offering attractive benefits.
Lifestyle credit cards
Lifestyle credit cards are also extremely popular among the credit cardholders in the country, as they enhance the consumer’s choices when it comes to dining, shopping, ticket bookings, and more. These credit cards offer various perks, as per the cardholder’s lifestyle requirements.
Secured credit cards
You can obtain a secured credit card against a fixed deposit. These cards come with low-interest rates and are usually opted for by individuals with a low credit score.
Shopping credit cards
Among the various types of credit cards, shopping credit cards are arguably the most popular, as they allow shoppers to save a significant amount on a wide range of purchases. Furthermore, banks are now partnering with e-commerce platforms to offer greater discounts and benefits; two such examples include the Amazon Pay ICICI Credit Card and the Flipkart Axis Bank Credit Card.
Credit card eligibility criteria
The Credit card eligibility criteria differ from one financial institution to the other. However, the usual factors include:
- Age: Usually, you have to be at least 21 years old to apply for a credit card. However, there are credit cards that require you to be at least 25 years old.
- Credit score: It is imperative that you have a good credit score (usually above 700).
- Employment status: While applying for a new credit card, you have to show proof that you earn a monthly income.
- Credit history: You must have a good credit history, with no previous defaults.