What's a credit card?
A credit card is not the same as a debit card - when you pay for something on a credit card you're borrowing money.Every time you use your card - whether it's to make a purchase, to withdraw cash or to transfer a balance from another card - you're effectively borrowing money.Each card is the subject of a credit agreement between the cardholder and the provider.You'll receive a copy of the credit agreement when you make an application.For instance if new purchases have a 0% promotional interest rate, but a balance transferred from another card attracts interest immediately.
You can find details of this on your credit agreement and it may also be included on your statement.If you do repay your balance in full each month, then no interest is charged.However, if you only make the minimum payment each month then it'll take you longer and cost you more to clear your balance, as interest will be added to your debt.
Advantages of Credit Card
- A credit card is safer than carrying cash. While there’s only a small chance of having lost or stolen cash returned, a credit card can quickly be cancelled if you lose your wallet. Most financial institutions also have security processes in place to protect you if your card has been lost or stolen or if you suspect your account has been used for a fraudulent transaction. If you’re in any of these situations, make sure to contact your bank to report the issue as soon as possible.
- A credit card can build your credit rating. Your credit card account details and payment history make up a key part of your credit file. If you keep your account in good standing, this information will help you build up a good credit score, which could increase your chances of approval for other products such as car loans or a mortgage.
- You can get interest-free days. If you pay your balance in full before the statement period ends, you can be rewarded with interest-free days on future purchases for a set period.
- Earn reward points when you spend. Rewards and frequent flyer credit cards allow you to earn reward points on every amount you spend on eligible purchases, such as the groceries and petrol costs. Rewards credit cards let you earn reward points to redeem with the bank’s rewards programs for perks including flights with partner airlines, products from the rewards store or cash back. Frequent flyer credit cards, on the other hand, let you earn flights with specific airline loyalty programs.
- Credit cards work in any currency. Although currency conversion fees usually apply, you can use your credit card overseas to make purchases in a foreign currency. There are even credit cards that waive fees for international purchases, which could be useful if you often shop at overseas online stores or have an international holiday coming up.
The different categories of credit cards are:
- Auto / Fuel Credit Cards
- Balance transfer Credit Cards
- Business Credit Cards
- Cashback cards
- Classic Credit Cards
- Co-branded Credit Cards
- Contactless Credit Cards
- Credit cards for Women
- Entertainment Cards
- Gold Credit Cards
- Lifestyle Cards
- Platinum Credit Cards
- Premium/Signature Credit Cards
- Prepaid Credit Cards
- Silver Credit Cards
- Titanium Credit Cards
- Travel Credit Cards
Silver Credit Cards:
Silver credit cards can be availed by anyone who falls under a nominal salary range and has a work experience of around 4 to 5 years. It is easy for salaried employees to procure this type of credit card, provided they have a good credit history. These cards have a low membership fee and there is no interest charged for the initial 6 to 9 months, on balance transfers.
Gold Credit Cards:
Individuals with higher income can avail a gold credit card from any bank in India. Applicants for any type of gold credit card should have a good credit score. The common features of a gold credit card are:
- High cash withdrawal limit.
- High credit limit.
- Add-on card facility for family members like spouse, parents or children.
- Travel insurance.
- Cashback offers.
- Rewards program and much more.
Classic Credit Cards:
Classic credit cards come with features like global acceptance, revolving credit, cash advance, interest free credit period, rewards program, supplementary cards, insurance and a dedicated 24/7 customer care helpdesk for customers. Most classic credit cards do not carry annual fees or joining fees and are offered at low finance charges.
Titanium Credit Cards:
Titanium credit cards are premium cards that come with a load of privileges and benefits. The key feature of a Titanium credit card is the Titanium Rewards program that is offered to the customers. This rewards program includes accrual of rewards points, redemption for gifts and air miles, cashback offers, etc. Other privileges that come with any Titanium credit card are surcharge waivers, revolving credit, interest free credit period, annual fee reversals, insurance, welcome gifts in the form of vouchers from top retail brands, add-on card facility, wellness and beauty offers, lifestyle and dining benefits, etc.
Platinum Credit Cards:
Platinum card is one of the most popular credit card and is owned by many people because of the number of benefits and privileges it offers. The benefits include lifestyle, dining, shopping and entertainment offers, etc. The annual, joining and renewal fee of Platinum cards are a little higher compared to other types of credit cards.
Auto / Fuel Credit Cards:
Fuel credit cards offer benefits on every fuel transaction that cardholders make. This card helps customers save on refuelling by providing them with cashback offers and fuel surcharge waivers. Some banks also offer accelerated rewards points on fuel transactions, if they are made at specific petrol pumps across India. The accumulated rewards points can be redeemed for refuelling for a predetermined value. Other additional benefits include activation bonus, entertainment benefits, dining, hotel and wellness offers, etc.
Steps To Compare Different Types of Credit Cards at About Research Solutions
Step 1: Choose the purpose of the card. Each credit card have different benefits and reward programs offered. Choosing the purpose of the card will help About Research Solutions to show you the most relevant credit cards available.
Step 2: Select your city correctly. There are many banks that offer specific cards and schemes for specific cities.
Step 3: Select employment. (Specifying whether you are salaried or self-employed).
Step 4: Enter your Personal Details. (Name, Gender, Address, Date of birth, Email id, and Mobile Number.)
Step 5: Enter your gross monthly income to confirm eligibility.
Step 6: Specify if you already own a credit card. If you do not have a credit card, you will have to tell if you have taken a loan previously. This is to check your credit history. If you already have a credit card, you will have to mention the bank which has provided your card.
Step 7: Select how are you getting paid. (Salary account, or if you are paid via cheque or cash).
Step 8: The next step is to fill in your personal details including your pin code,
Step 9: After checking the box to authorize the override of your DNC/ NDNC setting, you can view all the credit card offers that are available for you for an easy comparison of credit cards and select the card that seems most suitable to your needs.
Eligibility for a Credit Card
The eligibility for credit card varies according to the lender and the purpose for which the card is availed. The basic clauses include-
- Applicant should be at least 18 years old
- Applicant should be salaried or self-employed, with a regular source of income to pay back the credit card bills
- He should have a savings account in his name
- He should not have a bad credit history
Credit card eligibility depends on these factors —Purpose of card, city you are residing in, currently employed as salaried, self-employed professional or self employed business. A credit card eligibility calculator helps you analyse the card that suits you best according to your lifestyle on the basis of the above mentioned factors.