Credit cards have become an important financial tool in today’s times, which not only make your purchases easier but also provide you with additional benefits. Whether you want to avail benefits for travel, shopping discounts, or manage your expenses, there is a credit card available for every need. In this article, we will discuss the different types of credit cards and how to choose the right one for you.
What are Credit Cards?
A credit card is a type of payment card that allows you to make purchases within the credit limit. This card can help you improve your financial position, provided you use it correctly. It not only allows you to make cashless transactions but also offers the benefit of various rewards and cashbacks.
How a Credit Card Works?
When compared to other types of consumer loans, credit cards usually have a higher annual percentage rate. With the exception of situations where an introductory 0% APR offer is in effect for a brief period of time following account opening, interest charges on any outstanding balances charged to the card are typically assessed around one month after a purchase is made. Keep in mind that if past-due amounts are carried forward from the prior month, there is no grace period for new charges.
Credit card companies are required by law to provide a grace period of at least 21 days prior to the initiation of interest charges on purchases. For this reason, whenever feasible, it is a good idea to pay off balances before the grace period ends. Knowing if your issuer charges interest on a daily or monthly basis is also crucial because the former results in higher interest rates for as long as the balance is unpaid. Knowing this is crucial if you wish to move your credit card debt to a card with a lower interest rate. Savings from a lower rate could be lost if you mistakenly switch from a monthly accrual card to a daily one.
Types of Credit Cards
Credit card providers in India offer a variety of cards to meet your various needs. Here are some of the major types of credit cards:
Co-branded credit cards:
These cards are issued in partnership with another company and offer a number of exclusive benefits related to that brand.
Rewards credit cards:
Earn reward points for every spend, especially in certain categories such as dining, shopping, or travel.
Travel credit cards:
Offer a number of travel-related benefits such as free airport lounge access, travel insurance, and rewards on travel bookings.
Cashback credit cards:
Offer cashback on all your purchases, with higher cashback on certain categories.
Shopping credit cards:
Ideal for shopaholics, these cards enhance your shopping experience with discounts and rewards at partner stores.
Fuel credit cards:
Offer cashback or discounts on fuel purchases, helping you save on your fuel expenses.
Premium credit cards:
Offer exclusive benefits and perks, such as concierge services and luxury travel.
Lifestyle credit cards:
Designed to meet lifestyle needs such as dining, movies, golfing, etc.
Business credit cards:
Designed keeping in mind the needs of professionals and business owners, with features that include higher credit limits, expense management tools, and business-related rewards.
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Top Rated Credit Cards in 2025
| Name of Credit Card and Bank | Joining Fee | Annual Fee |
| IDFC First Millennia Credit Card | Nil | Nil |
| ICICI Rubyx Credit Card | Rs.3,000 + GST | Rs.2,000 + GST |
| Yes First Reserv Card | Rs.1,999+ Taxes | Rs.1,999+ Taxes |
| HDFC Regalia Card | Rs.2500 + Taxes | Rs.2500 + Taxes |
| FIRST Wealth Credit Card | Nil | Nil |
| HDFC Infinia Card | Rs.12,500 + Taxes | Rs.12,500 + Taxes |
| SBI SimplySAVE Credit Card | Rs.499 | Rs.499 |
| Axis Flipkart credit card | Rs.500 + Taxes | Rs.500 + Taxes |
| ICICI Emeralde Credit Card | Rs.12,499 | Rs.12,499 |
| Axis Bank ACE Credit Card | Rs.499 | Rs.499 |
How to Choose the right credit card for yourself?
When choosing a credit card, it is important to compare its features and benefits against your financial goals and spending habits. Below are some tips that can help you choose the right card:
Interest rates (APR):
- Consider the rate of interest charged on your outstanding balance. If you carry a balance month-to-month, a lower APR can save you money.
Annual fee:
- Compare the card’s annual fee with its rewards and benefits. For instance, some cards come with low or no annual fee, which may be affordable for everyday use.
Rewards and cashback:
- Look at the reward points or cashback percentage. If you spend heavily in these categories, such cards can be quite beneficial for you.
Key features and benefits of a credit card
Assess additional benefits such as airport lounge access, travel insurance and fuel surcharge waiver. If you travel frequently, travel vouchers and other perks can give you a good advantage.
| Welcome offers | Some cards offer attractive welcome bonuses, such as gift vouchers or bonus reward points. These can give you instant benefits as soon as you sign up. |
| Spending habits and lifestyle | Match the card benefits to your spending habits. For example, if you shop online, some cards give you discounts on specific categories. |
| Foreign transaction fees | If you travel internationally, consider cards that charge no foreign transaction fees. |
| Customer service and card issuer reputation | Research the card issuer’s reputation for customer service and support. A card with good customer service keeps you at peace and helps you manage your account effectively. |
Application Process for Credit Card
Applying for a credit card in India is a simple process that can be completed online or offline. Here is a step-by-step guide to make the process easier:
Choose the right credit card: Select the credit card that suits you based on your needs, spending habits, and compare different cards.
Check eligibility criteria: Includes age (usually 18-21 years), income criteria, and good credit score (often above 700).
Submit required documents: Proof of identity, proof of address, and proof of income.
Apply online: Visit the official website of the bank or credit card issuer, click on the ‘Apply Now’ button, and fill out the online application form with your personal and financial details.
Submit documents: Upload the specified documents. Some issuers may require you to submit physical copies.
Verification process: Credit score check, employment verification, and address verification.
Approval and card dispatch: Once the application is approved, you will receive a confirmation via email or SMS, and your credit card will be dispatched to your registered address in a few days.
Activate credit card: Activate your credit card by calling the customer service number, logging into your online banking account, or visiting the nearest branch of the card issuer.
Frequently Asked Questions (FAQs)
What are Credit Cards?
A credit card is a type of payment card that allows you to make purchases within the credit limit.
What is the use of Credit Card?
This card can help you improve your financial position, provided you use it correctly. It not only allows you to make cashless transactions but also offers the benefit of various rewards and cashbacks.
What is the 5/24 rule for credit cards?
The 5/24 rule, also known as the Chase 5/24 rule, is an unofficial Chase policy that stipulates that if you have opened five or more credit card accounts from any bank in the previous 24 months, you will not be granted a new Chase card.
How should a credit card be used wisely?
Pay off your balance every month. Pay the entire amount due each billing cycle to avoid incurring interest on your credit card purchases. You can benefit from using a credit card that doesn’t charge interest if you resist the urge to spend more than you can afford each month.
How do i qualify for a credit card?
You must fulfill specific eligibility requirements, such as your income, employment status, and credit score, in order to be eligible for a credit card.