Document
Document
70% Taxpayers Miss
Saving Taxes!
Plan now to save more taxes!
Enter details to receive communications from ClearTax

error-message

+91

error-message

error-message

Types of Credit Cards in India

By Mayashree Acharya

|

Updated on: Apr 1st, 2025

|

2 min read

The rising popularity of credit cards is reshaping the lending and credit landscape. With frequent launches, new credit cards bring innovative features and benefits, making the market more dynamic than ever.

The features and benefits of credit cards help classify them into various categories, allowing individuals to choose based on their needs. From basic credit cards for beginners to air miles cards that offer free flights.

Here’s a breakdown of the different types of credit cards

1. Basic Credit Cards: 

This credit card will be the preferred choice for those who wish to try out using a credit card. You will be given a small credit limit based on your income and you can make purchases with the given limit. There are no additional benefits given on transacting with the card.

2. Secured Credit Cards: 

Individuals who have a poor credit history can get hold of a secured credit card by making a deposit equal to the credit limit of the card. This deposit acts as a security to issue the credit card for banks. If you make payments on time consecutively for a few months, the bank may return the security deposit.

3. No Annual Fee Credit Cards: 

A no annual fee credit card is the one that does not levy an annual fee for the usage of the credit card. It can be considered as a basic credit or slightly above that level that provides very few benefits. Individuals at the entry-level of credit card usage or those who make limited use of the card would prefer a no annual fee credit card.

4. Low-Interest Credit Cards: 

Credit cards that offer a lower interest rate as compared to the other cards from a similar category is known as a low-interest credit card. However, this category is different from the balance transfer cards as the interest rate will not be as low as 0% and the rates are not valid for a specified time as in the latter case.

5. Balance Transfer Credit Cards: 

Though most credit cards offer the facility to transfer balance, a balance transfer credit card comes with a low-interest rate for a specified period of time. If your current card has a high-interest rate, you may transfer the outstanding balance on your current card to a balance transfer card with a low rate. Some cards offer an opening rate as low as 0%.

6. Rewards Credit Cards: 

A rewards credit card is the one that offers some kind of rewards for every rupee you spend with the card. Every bank defines the number of reward points you get for a specified type of transaction, such as grocery shopping and online bill payment, you make with each rewards card it offers.

7. Cashback Credit Cards: 

Cashback credit cards offer a certain percentage of the purchase amount as cashback whenever you make a transaction with the card. The bank may also mention criteria such as cashback is applicable only for petrol transactions.

8. Travel Credit Cards: 

  • Frequent travellers benefit from a travel credit card as the card offers benefits such as travel insurance, global acceptance, favourable currency conversion rates, and more.
  • Shopping Credit Cards: Credit cards that come with deals and offers when the card is used to pay for shopping expenses. Online and offline shopping can get you additional rewards for every purchase.

9. Entertainment Credit Cards: 

Credit cards that provide discounts and offers on entertainment-related spends are known as entertainment credit cards. Such spends include movie ticket purchase, concert ticket purchase, amusement park ticket purchase, and other events.

10. Airmiles Credit Cards: 

Every rupee you spend with an air miles card will offer air mile points to your card account. Upon accumulating the air mile points, you can redeem them for free flight tickets or other goodies available on the redemption catalogue.

11. Lifestyle Credit Cards: 

This type of credit card gives benefits when the card is swiped for lifestyle expenses such as premiere screenings, nightlife, fashion shows, and more.

12. Premium Credit Cards:

Premium credit cards are dedicated for selected few. It provides free access to golf clubs, airport lounges, concierge service, and insurance. It may also come with complimentary travel and hotel accommodation coupons. Some cards also offer a personal relationship manager to handle the assets of the cardholder. Not everyone can get approval to own this card.

13. Co-Branded Credit Cards: 

Banks tie-up with brands to bring out co-branded cards that provide special discounts and deals when you make a transaction associated with the brand. Though you can make other transactions, they wouldn’t be very profitable. This strategy is, generally, used to increase the customer base for the brand.

14. Student Credit Cards: 

The primary users of this category of cards are college students. The card considers the fact that students do not, often, have a credit history. The approval for a student credit card has fewer criteria to be satisfied as compared to the other full-fledged cards. It also comes with a lower interest rate.

15. Business Credit Cards: 

These cards are designed specifically for business use. This is to make sure that business and personal expenditure are maintained separately. However, even a business credit card requires you to have a good credit history to be eligible. This is because the card issuer considers the applicant to be accountable for bill repayment.

16. Prepaid Cards: 

Prepaid cards require you to load money before they can be used. Every transaction you make with the card, funds are fetched from the card balance. There is no finance charge or minimum payment criterion applicable to this card.

Related Articles:
1. Difference Between Credit Card and Debit Card
2. Getting A Credit Card For Your Business
3. How Credit Card Impacts Your Credit Score?
4. How to Insert an ATM Card into an ATM Machine?
5. How to Activate an ATM or Debit Card?
6. ATM Withdrawal Limit

Can't get yourself started on taxes?
Get a Cleartax expert to handle all your tax filing start-to-finish

Frequently Asked Questions

Which type of credit card is best for beginners?

A Basic Credit Card or a No Annual Fee Credit Card is ideal for beginners, offering a simple way to build credit with minimal costs.

How do I choose the right credit card for my needs?

Consider your spending habits—frequent travelers can benefit from Travel or Air Miles Credit Cards, while shoppers may prefer Rewards or Cashback Credit Cards.

What is the difference between a Secured and an Unsecured Credit Card?

Secured Credit Card requires a security deposit, making it ideal for those with low or no credit history. Unsecured cards don’t require a deposit but depend on your credit score.

What happens if I don’t pay my credit card bill on time?

Late payments lead to penalty fees, higher interest rates, and a negative impact on your credit score. It’s best to pay at least the minimum due to avoid penalties.

How does a Balance Transfer Credit Card help with debt?

Balance Transfer Credit Card allows you to move existing high-interest debt to a card with low or 0% introductory interest, helping you save on interest and repay debt faster.

Do all credit cards charge an annual fee?

No, No Annual Fee Credit Cards are available, ideal for users who want to avoid extra costs while maintaining a credit card.

How do Rewards and Cashback Credit Cards work?

Rewards Credit Cards offer points for spending, redeemable for discounts, vouchers, or gifts. Cashback Credit Cards provide a percentage of your spending as cashback, reducing overall expenses.

Can students get a credit card without a credit history?

Yes, Student Credit Cards are specifically designed for college students with minimal eligibility criteria and lower interest rates, making them a good starting point for building credit.

Help and support
close
Loading Chat ...
Chatbot LogoChatbot Button
About the Author

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.

Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.

CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.

Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.

Cleartax is a product by Defmacro Software Pvt. Ltd.

Company PolicyTerms of use

ISO

ISO 27001

Data Center

SSL

SSL Certified Site

128-bit encryption