1. Build your Credit Score
2. Reduce your Current Borrowing / EMI Costs
When thinking about credit cards, many people think that there is only one type of credit card. But this is not true. There are various types of this product. It all depends on what you require, or rather what your requirements are.
Right now, the credit card market is seeing an unprecedented growth. If you thought people would be more careful before taking new debt instruments after last year’s Covid-19, you’ll be incorrect. The opposite is the truth. More and more people desire credit cards since these financial instruments have the power to bestow immediate financial assistance.
Now, without any further ado, here are the various types of credit cards you need to know about:
Basic credit cards: If you are buying these for the first time, it is a good idea to start with a basic credit card. It’ll give you a small credit limit depending on your income level. You can use this credit limit to buy things. However, there are no additional benefits.
Secured credit cards: If you have a poor credit history, a secured credit card is what you should opt for. These are called secured because to get one of these cards, you deposit a certain amount of money. That’s your collateral.
No annual-fee credit cards: So most credit cards have an annual fee, right? Well, this type does not. You can say this is almost near to a basic credit card, with some added benefits. If you are getting your first ever credit card or have a low credit score, go for this.
Low-interest credit cards: This type of card charges low interest on spending. However, it is not a balance transfer card since its interest rate shall never be as low as 0%.
Balance Transfer Credit Cards: Most credit cards will offer you a balance transfer facility or service. However, this card type has the benefit of giving you a low interest rate for a certain period of time. So if your current credit card is having an oppressive high interest rate, getting a BT credit card can help since some of these come with an opening rate of 0%.
Rewards credit cards: These credit cards actually reward in one way or another each time you spend or use the card for purchases. A lot of cards come within this type. Generally, rewards are by giving you points which you can accumulate and use to buy things.
Cashback credit cards: These credit cards give you cash back rewards for your card use and purchases, for instance when you buy petrol. A lot of credit cards fall under this category.
Travel credit cards: If you travel frequently, travel cards give you tons of benefits like travel insurance, lower currency conversion rates, more lounge access, global acceptance and more.
Shopping credit cards: If you are an avid shopper, get this card! It offers attractive deals, offers and discounts for shopping.
Premium credit cards: These are not available to everyone, but only to a few people. Such people are invited to receive these premium cards because they have been long-term loyal customers with a spotless credit utilization record.