How to pick the Right Credit Card

A credit card is like a life saver for those who know how to use it and at the same time it’s capable of inflicting dreadful damage if used improperly. Here are few important things you should consider while selecting a credit card.

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  1. Spending Behavior:
    First thing you need to decide what kind of credit card user are you going to be? Are you the kind of person who’s going to use it for everything or you requiring it for the emergencies? Also give a thought about how are you going to pay your credit card bills? Your spending behavior is and your usage is of utmost important to decide the right credit card for you.

    • If you’re going to clear your credit card bill every month then you don’t need to bother much about interest rates. Look for a card with zero annual fee and maximum grace period.
    • If you’re someone who’s going to opt for flexi payments on your credit card outstanding the interest rated definitely matters you. So pick up a card with lowest interest rate and minimum annual fee.
    • In another case if the card is only for emergency purpose then pick up a card with lowest interest rate and minimum or no annual fee.
    • On the contrary to the above point if you require a card for everything you buy then lookout for a card with higher limit and best reward programs.

    So it’s very important for you to sit down and first analyze the requirement and the purpose for which you’ll be using your credit card.

  2. Checkout the interest rate:
    Each credit card gives an APR (Annual Percentage Rate), it can be a fixed rate or variable depending upon the Financial institute. At times offer rates are short lived and changes after a certain time. So please ensure the rates applicable once the offer ends.
  3. Card Limit:
    Credit limit is the total amount of money the issuer is ready to lend you. Credit Limit for an individual is decided based upon the credit history, monthly income, credit liabilities of the applicant, the limit can vary from few thousands to lakhs of Rupees.
  4. The Charges applicable to your cards:
    Most of the credit card issuers earn money from you by charging you various charges like transaction fee, balance transfer, cash withdrawal using your Credit Card, yearly subscription charges, reward point consumption charges, credit card re-issuing charges, late payment charges etc. So make sure you are aware of the rates and the possible charges on your card.
  5. Reward Programs Benefits:
    The sole purpose of all the credit card issuers for having a reward program is to induce the customers to use their card more often. All major credit card issuers have numerous reward programs to offer their clients. If you do lot of traveling then there are many card companies which offer frequent flyer miles, discounts on hotel, or car rental etc.

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