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Types of credit cards

Credit cards can be a convenient way to pay for a range of things, but different types of credit cards can be used for different purposes.

It's a good idea to compare credit cards to understand the ins and outs of each type. This can help you find the best one for you. Here's a quick rundown on some of the different categories.

HSBC has a variety of cards to suit every lifestyle. See which one is right for you

What are the types of credit cards?

Rewards card

A rewards card offers rewards for everyday spending. These credit card reward points can be redeemed for a range of goods and services, such as shopping vouchers and flights. They can also be used for discounts on family days out, restaurants and hotel rooms.

You can often earn rewards on a wide variety of transactions on the reward card, and sometimes there will be extra rewards for a specific type of spend (e.g. insurance or medical expenses).

The rewards may come at the cost of a higher annual fee, so look at whether you think the benefits will outweigh the costs. If not, you may end up paying more in interest and fees than you earn in rewards.

While credit card reward points can be a smart way to benefit from your normal spending, it's important to always spend within your means and understand exactly how the reward program works.

Banks will offer different rates for earning points for spending and also different things you can use your points for. If you're considering a reward credit card, consider how you'll spend and what you'd like to earn. This will impact which type of reward credit card may suit you best. Here are some examples of how this can work.

  1. Shopping points

    You may receive credit card reward points for every purchase you make on your reward card, for instance 1 point for every LKR100 you spend. The points earned can be accumulated and exchanged for vouchers that you can spend in supermarkets and certain stores.

  2. Air miles

    If you're a frequent flyer, it may be worth considering a credit card that earns you air miles on every purchase you make. These earned miles can then be exchanged for flights.

Cashback card

A cashback card offers a guaranteed cashback for everyday spending. Like a reward card, this can sometimes be available for a wide variety of transactions on the cashback cards, or targeted towards a specific type of spend (e.g. grocery, phone bills). The cashback may come with a periodic cap, so look at whether you think the benefits will outweigh the costs.

Get a voucher & cashback up to Rs.5,000 when you apply for an HSBC Credit Card.

Status card

These are cards that you will receive depending on your banking status, such as HSBC Premier. This will have special benefits including rewards across a variety of lifestyle needs and will usually be provided as part of the proposition with no additional annual fee.

Keep in mind

Taking out a credit card is a big decision and it's important to be sure you're aware of all the benefits and trade-offs of any cards you're interested in.

Making the most of a credit card

From managing your spending to building credit, here are some tips to help you make the most of your credit card.

Get to know what a rewards credit card can offer you, and how much it could cost you to use one.

When it comes to credit cards, there's no magic number you should have or blanket rules that will suit everyone.

Get to know the basics about credit cards - from seeing how  credit card interest works, to what you'll need to apply.

Disclaimer:

This document is issued by HSBC, Sri Lanka and is intended for reference and illustrative purposes only.  It does not constitute an offer or advice for you to purchase from or otherwise enter into a transaction with HSBC.

Please note you should make your own independent assessment prior to opting for any product or using the product.