Have you ever tried asking yourself about the 4 main types of credit cards? Well, you are not the only one. There are just too many credit cards types available out there; this may leave one puzzled but then know more about the credit cards and this enables one to select the best type of credit card. There are several main credit cards type, which consist of rewards, cashback, travel, and secured ones, each of which has its own advantages. Having this information about these type of credit cards will enable you to save more, control the bills as well as get a good credit record.
The time has come to get to know more about every type of credit card, their mechanics, and advantages and disadvantages, as well as when to choose them:
1. Rewards Credit Cards
Rewards credit cards are one of the most popular types of credit cards as they offer you the points with each transaction. These can be exchanged to discounts, vouchers, travel benefits or even gadgets.
Example:
- HDFC Millennia Credit Card – Earn 5% cashback on Amazon, Flipkart, and other top brands (in the form of reward points).
- SBI SimplyCLICK – Ideal for online shoppers, giving bonus points on e-commerce platforms.
Who should use it?
Shoppers who desire to have long term value purchases on everyday items.
2. Cashback Credit Cards
Rewards of this credit card type would be available when you receive the direct cashback on your purchases, i.e. not the points but just the direct money. It is easy, clean, and ideal to individuals contemplating on money back of things which are already being spent on.
Example:
- Axis Bank Ace Credit Card – 5% cashback on bill payments via Google Pay.
- Amazon Pay ICICI Credit Card – Up to 5% cashback on Amazon and 1% on other transactions.
Who should use it?
Frugal users who need to save some money in order to cut down the monthly payout through immediate payment.
3. Travel Credit Cards
In case you travel regularly or you are planning to see the planet, this type of credit card will allow you to save on traveling expenses. Travel credit cards will reward you by offering air miles, travel points and quality bonuses.
Example:
- Air India SBI Signature Card – Earn miles for every purchase and redeem them on Air India flights.
- American Express Platinum Travel Card – Get free flight tickets and Taj vouchers.
Who should use it?
Business travellers, frequent flyers, and people who are interested in travel kickbacks such as a lounge and insurance.
4. Secured Credit Cards
This is an excellent credit card type to use when one is a first time user or fails to have a high credit rating. A secured credit card provides a certain amount of credit having a certain lump sum in hand as the pillion of security.
Example:
- FD-backed ICICI Bank Coral Credit Card – Credit card issued against a fixed deposit.
- BOB Easy Credit Card – Secured card that helps build credit history.
Who should use it?
The unestablished users of credit or someone attempting to repair their own credit score, students.
Quick Comparison Table of the 4 Main Credit Card Types
| Credit Card Type | Key Features | Best For | Example Cards |
| Rewards Credit Card | Earn points on spending, redeem for perks | Regular spenders, lifestyle benefits | HDFC Millennia, SBI SimplyCLICK |
| Cashback Credit Card | Instant cashback on transactions | Budget-conscious users | Axis Ace, Amazon Pay ICICI |
| Travel Credit Card | Miles, lounge access, hotel discounts | Frequent flyers, business travellers | Amex Platinum, Air India SBI Signature |
| Secured Credit Card | Backed by FD, helps build credit | Students, low credit score users | ICICI Coral Secured, BOB Easy Credit Card |
Conclusion
At this point, you are familiar with the fact that the 4 main types of credit cards such as rewards, cash back, travel, and secured cards cater to the specific needs. The type of credit card that you take depends on your lifestyle, your habits of spending and also your financial objectives. Wherever you fall, as a shopper, as a traveller, or someone who just starts experiencing credit, there is a card that was made for you.
Being familiar with these types of credit cards will make you spend not only but wisely. Make a research of the main type of credit cards, choose an objective, compare features, and apply through the top cards available.
