Credit Cards

The use of plastic money and internet banking is responsible for the slow death of thepaper currency. You can use credit cards, debit cards as well as internet banking at almost every major store. Combine these means with a stable internet connection and you get a currency that you can use from remote locations. These currencies are better used with anonline shopping experience as well as shopping at large supermarket stores. Credit card is one of the most widely used means of currency nowadays.

What is a Credit Card?

A credit card is a means of obtaining a small amount of loan from the bank instantly. A credit card effectively replaces paper money. The bank pays the amount for you under the condition that you pay it back at the end of the month with a small amount of interest over it.

Types of Credit Card

Usually, the banks of several different types of credit cards classified according to the spending limit as well as extra features over it. Classification also occurs based on the interest charged or the type of account that the card is associated with it in the bank. A bank may offer several types of credit cards. Some of the commonly offered credit cards include,

  • Standard Credit Cards – These credit cards are usually available from the bank by filling a simple form while you open a new account with the bank. It usually does not come with any special features and offers you the lowest rate of interest.
  • Business Credit Cards – Business credit cards have a higher spending limit and banks award these cards to the executives to carry out hefty corporate transactions. These credit cards are directly linked to the company’s bank account.
  • Secured Credit Cards – The credit cards usually have a 50-100% spending limit of the money that you already have in your bank account. Banks associate these cards with high amounts of theannual fee as well as higher interest rates. You will most likely get a secured credit card on opening a new account with the bank, prior to having a credit history. On displaying a good credit history for a few months, this card can be upgraded to a standard or a reward credit card.
  • Reward Credit Cards – Banks often offer reward credit cards to lure customers into using the credit cards over debit cards. These credit cards are the most popular ones since they offer special rewards such as free movie tickets or discount on shopping from a particular store.

These are only a few types of credit cards. Other types include speciality, student, charge, subprime, balance transfer, etc. credit cards.

Advantages of Credit Cards

The use of credit cards has several advantages over the use of paper currency, debit cards, internet banking, etc. Some of these advantages include,

  • Secure a small amount of loan from a bank at a short notice,
  • Use as an emergency source of fund,
  • Payment at the end of the month after you get your salary/earnings,
  • Theft-proof, since you can protect it with a serial key combination,
  • Easy to apply for,
  • Handsome rewards with special credit cards,
  • Easy repayment directly via bank account,
  • Keep track of all your expenses with a monthly bill,
  • Offers on internet shopping portals,
  • Low-interestrates for high amounts,
  • Frequent cashback schemes,
  • Earn easy reward points over shopping,
  • Helpful in paying EMIs at low costs,

Apart from these benefits, you also get a grace period of the bill payment period of your credit card. In case you are unable to pay the credit card bill at the end of the month due to financial troubles, the bank allows you to pay the amount within a set grace period (usually 6-7 weeks), with a small fee before cancelling your card.

Credit Score and Credit cards

Your credit score is essentially the score on which a bank assesses your financial capability to repay a loan. Since the use of credit card is as good as taking a loan from the bank, the bank keeps your credit score in view before granting you a spending limit on the credit card that it gives you. If your credit score is excellent, the bank is comfortable enough to grant you a high amount of spending limit on your card. However, if you have a poor credit score, the bank might not give you a credit card at all.

Nowadays, you can easily know your credit score via several online portals that offer you the service for free. In case you are uncomfortable sharing your financial details online, you can go to your bank to get more information on your credit score.

Eligibility Criteria

Different banks have different eligibility criteria for giving a credit card to their account holders. However, there are some common practices that all the major banks follow. The eligibility criteria for getting a credit card from your bank include,

  • A Good Credit Score – A good credit score is a foremost thing that a bank looks for in a credit card application. With an excellent credit score, you can get premium cards with higher spending limits easily.
  • An Account with the Respective Bank – You need to have a bank account, preferably a fixed deposit account, with the bank that you wish to get a card from.
  • Age Limit – The banks usually offer you with a credit card in India when you are minimum 21 years of age. Under special circumstances, such as on theapplication of a student credit card, the bank can offer you a credit card on the joint account that you and your parents share.
  • Employability and Steady Flow of Income – The banks prefer a steady flow of income for the person who is applying for the credit card.

Bank Providing Credit Cards

Most of the major banks in as well as out of India offer a credit card to its account holders. These banks offer some or more of the credit card types mentioned above, to their account holders. Some of the banks that offer a credit card in India include,

ICICI Credit Card

ICICI is one of the most popular banks in India. It offers various types of credit/debit cards to its account holders. Some of the offered cards include:

  • Sapphiro Credit Card – Premium card with a large spending limit,
  • Jet Airways Bank Coral Visa – Free access to the airport lounges,
  • Ferrari Platinum Card – Discounts on Purchase from Ferrari store,
  • Rubyx Credit Card – Get access to 2 free movie tickets on booking through BookMyShow.

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RBL is one of the oldest and most reputed banks in India. It has a good history and a lot of connections in the media as well as start-up industry. The RBL bank is most famous in Maharashtra due to its extensive support and friendly customer helpline. RBL too offers a wide range of credit and debit cards to its account holders.

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Amex, short for American Express is another one of banks offering its services in India. People that frequently travel across international borders prefer American Express credit cards since it has a wide support within as well as out of India. American Express offers you special membership bonus points on joining the bank and applying for a credit card. You can easily apply for an Amex card using its online portal.

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Unlike other banks, Citibank offers only 4 major types of credit cards to its account holders. However, these 4 credit cards are all that you will require in order to avail all the possible benefits that credit cards from other banks offer. Citibank has a good collaboration with the online shopping giant in India, Flipkart. You can often see a cashback or discount listed on its website upon the use of a Citibank credit card.

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Standard Chartered Bank is another one of the popular bank giants that offer excellent international services. Standard Chartered Bank has collaborated with the online shopping portal giant Amazon to offer attractive discounts and cashback offers upon payment with a Standard Chartered Bank credit/debit card.

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HDFC bank offers a wide range of credit cards to its account holders. With low-interest rates and flexible bill payment options, HDFC bank credit cards are some of the most popularly used cards in India. You will also find HDFC collaborating with several online shopping portals from time to time to offer cashback and other attractive offers to its customers.

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Kotak Mahindra Bank has established itself as one of the most premium banks in the country. It offers you one of the highest interest rates on a savings account, given that you fulfil a few credit score and initial balance criteria. Kotak Mahindra bank has a limited number of cards but they offer great discount options for the customer periodically. The joining fee for most of the Kotak Mahindra Bank credit cards is virtually nothing.

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