Credit card is a payment instrument issued by financial institutions to allow a cardholder to make cashless payments. Cardholders borrow funds from financial institutions to pay for goods and services, and the borrowed amount is repaid via a monthly bill payment within a predetermined time frame. Credit card also includes a line of credit issued to cardholders, which acts as the maximum threshold within which an individual can withdraw and utilise the funds.
Credit cards are quickly becoming one of the primary modes of transaction across India. Research shows that card usage is expected to grow by at least 25% during 2020–2025, with Rs.1,87,000 million transacted in May 2020 alone. Known mostly as a debit dependent economy, India is slowly becoming aware of the benefits of using credit cards wisely.
Different types of credit cards
Financial institutions offer several types of credit cards to cater to the unique requirements of different users.
While the basic credit card meaning does not change among its variants, the features, benefits, rewards, and other factors vary to some extent. Let’s take a look at some of the most common types of feature-rich credit cards currently available in the Indian market.
Credit cards for travel – Travel credit cards offer more discounts on air and rail ticket booking, hotel reservations, foreign purchases, etc. Cardholders can also enjoy benefits like complimentary lounge access, gifts, cashbacks, etc.
Shopping credit cards – Frequent shoppers can get attractive discounts, cashbacks, gift vouchers and similar perks if they use a shopping credit card for their purchases. These benefits are available for both online and offline shopping, and the reward points collected through retail transactions can further be utilised for future purchases.
Other than these, ordinary credit cards also offer different perks depending on their limits, charges, and other factors. Customers can easily utilise the features and benefits of a credit card to make maximum savings on their transactions.
The increasing demand for credit cards
Throughout 2020, there has been an increasing demand for premium credit cards, as well as an increased search for how to apply for a credit card. Almost 43% increase was noticed in demand for premium credit cards across the nation, along with 111% increase in credit score checks.
There are several reasons why credit cards have become popular. For example, credit cards are more convenient and allow an individual to build a credit score with responsible usage. Certain cards, like the Bajaj Finserv RBL Bank SuperCard, also allow cardholders to pay for their big-ticket purchases on EMIs.
Further, the card issuer also provides pre-approved offers to existing customers, which simplifies the application process and helps save time. These offers are available on financial products like credit cards, personal loans and business loans. You can check your pre-approved offer online by sharing only some essential details.
How to apply for a credit card?
You can easily apply for a credit card online. With the integration of online services, the entire process has become significantly simple and quick. Applicants can select a particular financial institution depending on their preference, post which they can check the eligibility criteria and regulations implemented by that particular lender. Usually, these include the verification of address, income, identity, and other essential factors. Applicants also have to submit some documents backing the verification process.
Applicant can apply for a credit card by filling up and submitting the online form along with the documents required. It will be checked and verified by the financial institution, and the card will be issued if the applicant meets all the requirements.
The long list of benefits and a simple application process makes credit cards one of the most convenient methods of payment. The safety and convenience it offers, along with the rewards and benefits, only makes it a useful financial tool for everyone.