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15 Types of Credit Cards in India and Usage

Credit Cards

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June 2, 2018

There are several types of credit cards available in India. The type of credit card is decided based on the benefits and rewards they offer on a specific category and spending requirements.

For example – If you love to do shopping online, then a “Shopping Credit Card” is best for you. You earn discounts, cashback, and rewards on these types of credit cards. Suppose you are a frequent traveler you can benefit a lot from a Travel credit card. These types of credit cards help you to earn air miles, access to airport lounges, etc. From the above examples, you must have understood that for specific requirements and usage, Credit Card Company offers a specific category of credit card. Too many credit card options create anxiety and you may end up taking wrong decision.

To help you out, I’ve compiled some basic explanations of credit cards, as well as types of credit cards and usage. You can select the type of credit card based on your requirements and usage.

Type of Credit Cards

There are various options for cash. Credit card is one of them. Credit card is a plastic money that makes life very simple. You can use a credit card to buy goods and services on credit. You need to return this money every month or at the latest before interest-free credit period else you need to pay interest on your outstanding balance. After understanding basics of credit cards let’s take a look at the types of credit cards available in India.

Also Read – Best Credit Cards in India – Review & Comparison

15 Types of Credit Cards in India and Usage

Business Credit Cards

Business Cards are designed for businessmen and corporates. It is one of the fastest ways to get finance to run your business. These types of cards is also known as corporate credit cards. Business credit card offers benefits such as expense monitoring and control, insurance, business saving plans, lucrative travel and accommodation deals, higher credit limit and advanced facilities. Few best credit card in this category is the SBI Corporate Platinum card, Business Money Back HDFC Card, and My Business Credit card from Axis Bank.

Balance Transfer Credit Cards

Balance Transfer credit cards or facility allows cardholders to transfer existing outstanding balances from one credit card to another. So, if you are worrying about massive credit card dues you can use these types of credit card facilities. The bank charges normal processing fees for balance transfers. Most of the balance transfer cards do not charge interest rates for the first three months.The few recommended banks for opting balance credit card/facility are ICICI, SBI, and Standard Chartered.

Cashback Credit Cards

Everyone likes to earn more money if you are one of them you should try a Cashback Credit Card. Cashback Credit cards allow you to earn money by spending money. The cashback amount and rewards depend on the issuer. The best Cash Back Credit Cards are the Citibank Cash Back Credit Card and Standard Chartered Manhattan Platinum Credit Card.

Also Read – 7 Best Free Credit Card India

Co-branded Credit Cards

Co-branded credit cards are offered by banks in association with a retail brand, online e-commerce website, or travel aggregator. This card is specially designed to offer privileges associated with co-brand. If you are married to a specific brand you can plan to opt for this type of card. A few examples of co-branded credit cards are the Yatra SBI Credit Card, IRCTC SBI Platinum Credit Card, and HDFC Snapdeal Credit Card.

Credit Cards for Women

Few Credit cards are exclusively designed for women. These credit cards mainly focus on shopping rewards, and cash back as women are fond of doing extensive shopping. Apart from that, this card also offers extra benefits such as shopping vouchers, surcharge waivers, insurance, etc. A few examples of credit card for women are HDFC Bank Solitaire – Premium Women’s Credit Card, Citibank Rewards credit card, and ICICI Bank Coral card.

Credit Cards for Online Shopping

If you are fond of shopping you can surely go for the following best credit card for online shopping in India. This type of credit card is designed to offer online shopping benefits. You can avail discounts, e-vouchers, and options for shopping on EMI via these types of cards. A few popular online shopping cards are SBI Simply Click and Axis Bank Buzz credit card.

Classic Credit Cards

The main features of Classic Credit Card are global acceptance, cash advance, interest-free credit period, supplementary card benefit, card loss insurance, and dedicated customer support. Few examples of classic credit cards is the IOB Classic Credit card, Indian Bank Global Classic Credit Card, and ICICI Bank British Airways Classic Credit Card.

Entertainment Credit Cards

If you are spending a lot of money on entertainment such as movies, dramas, shows and events you can opt for an entertainment card. This type of card is mainly designed to offer amazing entrainment benefits. It also offers extra benefits such as reward points and discounts on dining. Best Entertainment credit cards are the HDFC Titanium Times Card and Kotak PVR Gold Credit Card.

Fuel Credit Cards

Fuel Credit Cards are specially designed to offer benefits on fuel including discounts, cashback, and surcharge waivers. You can make use of a fuel credit card and bring down the cost of fuel expense from the household budget. If you spend heavily on petrol and diesel you can use this card. A few recommended fuel credit cards are Standard Chartered Super Value Titanium Card, ICICI Bank HPCL Coral American Express Credit Card, and Indian Oil Citi Platinum Credit Card.

Life Style Credit Cards

Life Style Credit Card as the name suggest is a credit card that offers benefits on changing lifestyle and income of cardholder. These type of cards offers shopping, dining, travel, and other exclusive benefits on lifestyle. One such card is the Axis Bank Signature Credit card with Lifestyle benefits.

Prepaid Credit Card

A prepaid credit card as the name indicates is a preloaded credit card with a specific amount. There are two types of credit cards in the prepaid category namely domestic currency and forex credit cards. A prepaid card is as good as a debit card. You need not worry about clearing dues and interest rates as usage is allowed only based on money deposited by you.

Premium Credit Cards

A premium credit card as the name suggests, is a credit card for premium customers. These types of cards are designed to provide extraordinary premium services such as club membership, concierge services, dining privileges, etc. High income and high spending are requirements for premium credit cards. If you have high income level and capacity to spend. The best premium credit cards are the HDFC Regalia Credit Card and Citi Prestige Credit Card.

Also Read – Best Cashback Credit Cards with Best Cashback Offers

Students Credit Cards

A student credit card are card that is offered to students at the college level. There are very few banks that offer student credit cards in India. The main requirement of this credit card is students should be above 18 years of age. This type of credit card is offered against employment documents, Income tax returns or income proof.

Secured Credit Cards

A Secured Credit Card is a card offered by the bank against a fixed deposit. This deposit serves as a credit limit for the cardholder. If you don’t have a good credit history and you are facing problems getting a credit card you can use this option. In this card if the cardholder default on payments, the bank can deduct the amount from the deposit.

Travel Credit Cards

Travel Credit card is best suitable for the person who is traveling frequently. The travel credit card offers multiple benefits like air miles, free access to the airport lounge, benefit on accommodation, travel insurance benefits, etc. A few recommended travel credit cards are Citibank PremierMiles Credit Card, American Express Platinum Travel and JetPrivilege HDFC Bank World Credit Card.

The above list includes the most popular credit card types. However, there are a few other credit card types and names that are defined by banks such as contactless credit cards, lifetime free credit cards, virtual credit cards, credit cards for low-income groups, gold credit cards, Platinum credit cards, signature credit cards, etc.

A credit card can be a very good tool that provides multiple benefits. However, you have to use credit cards wisely. Excessive usage of credit cards leads to a huge financial burden. If you decide to use a credit card and trying to find the best credit card here are few important credit card tips for selection and usage.

Know your payment habits and spending habits before making a selection of a credit card.
Compare features and get information about annual fees, interest rate applicable, and Interest-free grace period before taking a credit card.
Get complete information about credit limits and interest-free credit days before opting credit card.
It is advisable not to keep multiple credit cards.
Always choose a credit card that has excellent customer care support.
Keep track of all your purchases. If possible, maintain all receipts of purchase.
Don’t get carried away by doing impulsive shopping.
Use the credit card for needs not wants.
Pay off your bill every month. If possible set up Auto Debit Facility
Take maximum benefit of rewards and cashback.

I hope the above credit card tips and types of credit cards help you in making a selection of credit cards. If you are still facing issues in the selection of credit cards post your query in the comment section given below.

How to Find Best Child Education Investment and Saving Plan?

Investment

Shitanshu Kapadia

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May 30, 2018

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How to Find Best Child Education Investment and Saving Plan?

I want to invest money for child education and marriage. He is 1-year-old. Please suggest some best child education and saving plan. This question was asked on Zee News program “Money Guru” recently. An advice given by expert was purchase term plan and invest in child plans like ICICI Childcare plan and HDFC Child gift fund. Well, it was very easy for an expert to identify and advice on Best Child Education Investment and Saving plan. However, do you think that this advice is making sense?

Rather than making an investment on ad-hoc basis based on advice by so-called expert, it is better to put a plan in place to meet your child education need. In this post, I will try to show you approach that can be used to identify Best Child Education Investment Option.

Why it is important to plan for child education?

The cost of education is skyrocketing in India. It is a big reason to worry for the middle-class parents.

Data shows that fees of premier institute IIT for engineering have increased by five times in last 10 years. IIT (B.Tech) fee was 2.28 Lakh in 2008 and now it is 10 Lakh. Similarly, fees of IIM for PGP course has nearly doubled. A fee of PGP course in IIM Ahmedabad was 11.5 Lakh in 2008 and today it is costing 19.5 Lakh.

Forget premium institute like IIM and IIT, an average fee of Engineering course is roughly Rs 6 Lakh today, five years down the line it would be close to double meaning Rs 12 Lakh. In 10 years’ time, it’s likely to cost around Rs 20 Lakh.

Child Education Investment

The growing cost of education has no dead end. The options left with you succumb to the situation by taking education loan or plan for child education.

How to Find Best Child Education Investment and Saving Plan?

Plan for Higher Education program

First step is to plan for higher education program. Identify two-three good career options for your child. I know it is difficult to zero down to education option at this stage. Still, for the planning purpose select career option based on your wish and your child interest.

Find out Target Year

The second step is to find out target year by when you are likely to spend this money. It is very easy to find out this. If your child age is 1 year then he will enter in graduation year after 18 years. This means if you are planning for engineering target age would be 18 years. If you are planning for MBA after graduation target age would be 22 years.

Also Read – Cost of Child Education – Planning and Calculator

Find Current Education Cost

Now based on education option selected by you try to find out current cost. It is very easy to find this cost. First decide educational institute and location where you are planning education of your child. You have various options such as government college, self-finance collage, deemed university, REC, IIT etc. Now find out current education cost applicable to course and institute. You can get this information from website or from institute itself.

Find Future Education Cost

Next step is to find future education cost. It is very difficult to predict future education cost. There are various methods to do so. First is consider roughly 8-10% inflation every year and find out future education cost. Another method is use simple excel formula of FV (Future Value).

If you are not familiar with excel you can use following formula to calculate future value.

Future Value (FV)= Present Value (PV) (1+r/100)ⁿ

where;
FV= Future value of your goal
PV= Present value or current cost of your goal
r= annual rate of inflation
n= time left to reach your goals (in years)

Discover Yearly or Monthly Investment Amount

Now discover yearly or monthly investment amount required for reaching the target amount. It is a difficult exercise and you need to assume expected returns from investment options where you will be investing money.

You can use simple excel formula PMT for doing this. PMT is a financial function that calculates investment required for an option based on constant payment and constant rate of return. It may not be a full proof method but you can get an idea about the amount required for investment. You can use simple calculator developed by us for calculating child education cost.

Download Child Education Calculator

Discover Best Investment Option

Once you are done with above exercise, you need to find out investment option which can generate a return as per your expectation. I suggest not to invest in fixed deposit, term plan or ULIP for child education.

As per me, a mutual fund is one of the best investment options for child education planning. You should select 2-3 good equity oriented mutual funds and start SIP. Make sure you select mix of a large-cap and mid-cap fund for investment. Select the mutual fund with good historical return matching with your expected return. Keep on increasing SIP on your salary increment or on child’s birthday. If you are a high-risk investor you can try equity also.

If you are a conservative investor and don’t want to invest in mutual fund. I would advise considering PPF as next investment option. PPF is a 15-year scheme that helps you to generate tax –free corpus for your child education. You can partially withdraw money from PPF account after the sixth year and you can close the account after 15 years. However, please note that expected return of PPF is lower compared to mutual funds.

Also Read – 7 Things you must do for your child

Important Points to Consider for Child Education investment planning

Start Investment at an early stage. It is easy to achieve the target if an investment is started at an early stage. Power of compounding plays an important role when it comes to investment.
Select best investment options with higher returns. Track your portfolio at regular interval and make appropriate changes.
Select Tax efficient investment options. Don’t invest in fixed deposit. Also, avoid endowment plan or money back plan. The expected return of these type of plans is nearly 6-7%.
Make sure to create a separate portfolio for child education. Identify and tag fund or portfolio. This will help you for tracking the performance of the fund.

In the end, I would like to say that don’t invest your money blindly. Invest only if you are sure about investment scheme and returns.

10 Best Business Apps to Enhance Business Productivity

Business Ideas

Shitanshu Kapadia

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May 28, 2018

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Imagine how easy it is if a command is given and a task is completed. Well, it’s not daydreaming. There are few best business apps and tools which helps you to achieve the same. You just need to give instructions like sending email, completing a routine task or finding something from internet everything controlled from voice command. It is like Google Home Speaker or Alexa device which can ease out your job.

The Best Business Apps are intended to increase business productivity and efficiency. These business apps ease out the life of the business owner.

It is known fact that starting a business and running it successfully is not child’s play. You need to train yourself for doing numbers of jobs at the same time. You might need to clone yourself to set everything right. If you are frustrated with a number of tasks and looking for a magic wand that helps you to enhance your business productivity, here is a list of 10 Best Business Apps at your disposal.

best business apps

The list contains both free and paid apps. For better understanding, I have divided these business apps into following categories.

#Best Business Apps for Enhancing Productivity
#Best Business Apps for Finance
#Best Business Apps for Communication
#Best Business Apps for Time Management
#Other Best Business Apps

Also Read – 5 Small Business Apps to improve your business efficiency

10 Best Business Apps to Enhance Business Productivity

Best Business Apps for Enhancing Productivity

IFTTT

The first best business app is IFTTT. It is one of the most powerful free app available for both Android and iOS platforms. The main purpose of IFTTT is to automate the task. This app connects app, devices, and services from different developers and provides you control. You can control everything around you with your voice and Amazon Alexa or Google Assistant.

You can perform series of automatic activity by using IFTTT. In IFTTT, one event gives trigger to other for completing action automatically.

OS Supported – Android and iOS

Price – Free

RoboTask

RoboTask is a second-best business app in the list. RoboTask as the name suggests, it is for automating repetitive tasks. It is windows based tool. This tool helps you to automate mundane task such as checking email, moving or backing up files to uploading or downloading, sending email etc. It is paid tool. However, you can use this tool for 30 days’ trial.

OS Supported – Windows

Price – Paid

Trello

Trello is one of the best business apps that keep tracks of everything. It is project management app recommend for small and medium business. It is a free app available on Android platform. You can organize various task, create a workflow, assign a task to yourself and coworkers. You can even create boards organize anything on which you are working.

OS Supported – Android and iOS

Price – Free & Paid

Also Read – 15 Tools & Apps for startup company

Best Business Apps for Finance

ZOHO Books

ZOHO books is best accounting app for the business. ZOHO books provide a facility for invoicing, inventory, GST return filing, bank reconciliation and reporting. It is the best tool for the small and medium enterprise. It is paid tools. It comes with multiple other modules such as CRM Module for sales and marketing, IT helpdesk tool, HR tool for recruitment etc.

OS Supported – Android and iOS

Price – Paid

Expensify

Expensify is spent management and control app. Expensify helps you to streamline business travel and tax compliance with expense reports. It is one of the best business apps for small business. Expensify paid app that allows you track your expense. An Advance version of Expensify helps you with reconciliation, multistage workflow & ERP integration.

OS Supported – Android and iOS

Price – Free & Paid

Best Business Apps for Communication

Fuze

Fuze is one of the best-unified communication apps for your business. From voice, video to messaging this app fulfill almost every communication need of business. You can even do content sharing, webcasting and web conferencing using this tool. You can use this app both on the desktop and at mobile.

OS Supported – Android, iOS and windows

Price – Paid

Slack

Slack is cloud-based team collaboration tool. It is one of the best business apps. You can share and edit documents and collaborate online with your team using Slack. You can also search through knowledge database that is indexed automatically. Organizing task and collaborating with the team is very easy by using Slack. You can use this app even on your mobile.

OS Supported – Android, iOS, windows, and mac

Price – Free & Paid

Best Business Apps for Time Management

Rescue Time

Rescue Time is one of the best business apps for time management. This app runs in the background on your mobile and computer and track time spend on each application and website. You can get detailed reports about time spent and activity performed. A paid version of this application performs a premium task such as detail report, alerts, blocking etc. This app is available for all types of OS.

OS Supported – Windows

Price – Free & Paid

Remember The Milk

Remember The Milk is a free app that helps you to manage everything you have to do in coordination with many different devices. This tool is compatible with mobile, computer, Gmail, Outlook etc. You can assign a task to others and get notified of actions.

OS Supported – Android, iOS, Windows, Mac, and Linux

Price – Free & Paid

Other Best Business Apps

MailChimp

MailChimp is a marketing platform for small business. You can create an email list and send beautiful emails to customers. This tool provides you advance analytics report showing click rate. It is a web-based tool which offers free email facility up to 2000 subscribers.

OS Supported – Android and iOS

Price – Free & Paid

The right tools can transform the way you work, helping you get more done in less time. From managing projects to streamlining communication and everything in between, these 10 business apps are designed to supercharge your productivity. Remember, the goal isn’t to use every tool out there; it’s about finding the ones that fit your unique needs and sticking to them. So, pick a couple, give them a spin, and watch your business thrive.

Digital Loan against Mutual Funds (LAMF) – Should you opt?

Mutual Funds

Shitanshu Kapadia

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May 26, 2018

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digital loan against mutual funds

Digital Loan against Mutual Funds (LAMF) is new facility by HDFC. This facility allows you to get a loan against mutual funds instantly. So, if you are mutual fund holder and looking for an urgent cash in an emergency situation, you can leverage your mutual fund portfolio to avail money without liquidating your investment or stopping regular investment plans or SIPs.

What is Digital Loan against Mutual Funds?

Digital Loan against Mutual Funds, as the name suggests it is paperless, instant overdraft loan facility against a mutual fund. The main rationale behind the launch of this facility is to reduce the time required for approval of the loan and address instant cash requirement of the customer.

As of now redemption of mutual funds take minimum 3 days. Even any loan approval takes minimum 2-3 days’ time. Even it requires a lot of documentation. Digital LAMF, helps you to get an instant loan in 3 minutes. You just need to select mutual fund which you would like to pledge, calculate overdraft limit and open a current account online and get the money into account instantly. This product is available for resident Indians and for portfolios which are individual holdings. The facility of Digital Loan against Mutual Funds is given to HDFC customers only. The first-time borrower with no credit history can also avail the facility of Digital LAMF.

Also Read – Loan Against Property – Should you opt?

Purpose – The fund raised from LAMF is strictly for the personal purpose usage only. You cannot use this fund for any of following –

For Speculative purpose
For any anti-social or illegal purpose
For purchase of land, Gold, Gold ETF/Gold bonds/Gold mutual funds
Not for capital market/purchase of mutual funds/fixed maturity plans/bonds/debenture

How much you can borrow under this scheme?

If you are taking a loan against equity-oriented mutual funds, you can select any amount between 1 Lakh to 10 Lakh in permissible multiple based on your mutual fund holdings. In case you are planning to take a loan against debt fund, you can get loan up to 1 Cr based on the valuation of your mutual fund.

Based on nature of mutual fund schemes loan percentage is decided. If it is equity mutual fund you can get 50% overdraft facility. If it is debt fund you can avail 80% overdraft facility.

Also Read – Loan against LIC Policy – Online Facility

What is interest rate applicable for Digital Loan against Mutual Funds?

The interest rate applicable to Digital Loan against Mutual funds is floating. It is linked to Reference Rate (HDFC Bank’s Marginal Cost of Funds based Lending Rate (MCLR) for the time being). As it is a loan against security, the interest rate charge is lower compared to personal loan.

Annual Percentage rate applicable on Digital Loan is given below.

Product	Min APR	Max APR	Avg APR
Equity Mutual Funds	9.25%	11.14%	10.32%
Debt Mutual Funds	7.95%	10.62%	9.71%

The interest rate is applicable only on the amount you actually utilized, and not on amount opted by you. In addition to interest rate following other charges are applicable to this loan.

Annual Maintenance Charges – 0.50% of the sanctioned credit limit. Minimum Rs.1000 and maximum up to Rs.5000.

Processing fees – Rs.500

HDFC Digital LAMF is offered against any equity and debt fund offered by following mutual fund companies.

DSP BlackRock Mutual Fund
SBI Mutual Fund
ICICI Prudential Mutual Fund
Kotak Mahindra Mutual Fund
HSBC Mutual Fund
L&T Mutual Fund
Tata Mutual Fund
Mahindra Mutual Fund
HDFC Mutual Fund
IDFC Mutual Fund
Aditya Birla Sun Life Mutual Fund
Union Mutual Fund
PPFAS Mutual Fund
IIFL Mutual Fund
Shriram Mutual Fund

Key Benefits of Digital Loan against Mutual Funds

You can avoid selling your best performing mutual fund and use LAMF in case of money requirement.
Instant loan approval and availability of money in few minutes.
Entire process is digital and does not require physical visit to bank branch.
Loan is offered against both debt and equity based mutual funds.
Loan can be extended to even first-time borrower without credit history
Overdraft account and interest applicable only on the utilized amount.
Loan amount can be enhanced any time.

Also Read – 5 Best Banks for Personal Loan in India

How to apply for Digital Loan against Mutual Funds?

The process of applying for a digital loan against mutual funds is very easy. You can apply for a loan in three easy steps.

Log into to your CAMS via HDFC NetBanking facility. You need to use your HDFC bank account ID, password. After entering your KYC detail and selecting relevant options you will be taken to mycams website.

loan against mutual funds

Select the mutual funds on CAMS portal to mark lien. Calculate the eligible limit by choosing a number of units from selected MF. Check the LAMF Terms and condition and declaration
Input One Time Password (OTP) and enter branch detail where overdraft account is required.

Should you opt for Digital Loan against Mutual Funds?

A most important question that must be popping up in your mind is should I opt for this facility? Well, it depends on the purpose of loan and urgency.

If you want to avail this facility for buying a bike, expensive wristwatch, cloths, foreign vacation or entertainment. It is BIG No for LAMF.

You should use loan against the mutual fund in case of extreme emergency situations such as medical need or dreadful need of fund, where you don’t have any other option and you want to liquidate your investment made for a specific financial goal.

Ideally, you should make an emergency fund. An emergency fund is planning for the unplanned event. The emergency fund will help you to fight with financial emergencies like job loss, unwanted medical expenses and you can avoid taking a loan for emergency.