Popularly known as plastic money, credit cards are rapidly growing in India due to the increasing financial awareness in the country. They are a multipurpose financial tool which can be used to make payments for a host of your day-to-day needs.

But while you might have heard about credit cards or probably have even seen people using them, what actually are they? Are there different types of credit cards in India? Let us have a look-

What are Credit Cards?

While a debit card allows you to use the money you already have in your bank account, credit cards let you borrow a loan or credit from the card provider. When you use the credit card for a purchase, you receive the transaction amount as a credit from the card provider.

Repay this credit to the card provider within the grace period, and you will not be required to pay anything extra. However, if you fail to pay it back within the time period, you will be required to pay additional interest on the credit amount while repaying.

How to Get a Credit Card?

You are required to apply for a credit card based on your spending needs. Card providers have credit card eligibility requirements based on which they accept card applications. Factors like your income, credit history, age, etc. are taken into consideration by the card providers to approve your application and set the card limit.

Popular Credit Card Types

The types of credit card and their features/benefits vary between card providers. However, most companies do offer these popular cards-

  • Silver Credit Card
  • These are the basic credit cards which most of the card providers offer. These cards generally have a low membership fee and minimum eligibility requirements.

  • Gold Credit Card
  • People with a higher income and credit rating can get a gold credit card. These cards come with higher cash withdrawal credit limit and offer several privileges such as cash back, reward points, travel insurance, and more.

  • Platinum/Titanium Credit Card
  • A platinum or titanium credit card is considered more prestigious than silver and gold cards. They offer significantly better features and benefits, but the eligibility requirements are high too. These cards provide additional features like card theft protection, fraud online transaction protection, and more.

Now that you have a basic idea of how credit cards work and the different types of credit cards, look for a reputed card provider to browse through the options they offer. Check the terms and conditions of the card carefully before applying to avoid any discrepancies in the future.

Learn more about Mutual Funds for a good personal financial management.


DISCLAIMER

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.



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