Checklist to Pick the Right Credit Card

Credit Cards have several advantages, but no two cards have the same set of benefits. The same card may appear perfect for your friend who is a movie freak, but may not offer you such benefits for dinner at a restaurant. One size fits all theory does not apply to these cards. Just like there is a specialist for every other thing, the Credit Card that you hold has specialisation of its own. Which card will be suitable for you depends on a number of factors given below:

1. Your credit score

Every Credit Card has eligibility criteria which the client needs to fulfill. When opting for a Credit Card, firstly count your chances of getting an approval from the bank. Companies which are preferred by clients will have better perks, and of course, tougher criteria to measure your eligibility.

2. Your spending habits

Whether you spend more on travelling, or on food and lodging; the card appropriate for you depends on that. A person who watches movies more often needs a different kind of reward card as compared to a shopaholic.

3. Your purpose of taking the card

While many people buy Premium Credit Cards to enjoy the luxuries offered, there are people who for the sake of making their credit score better would apply for a card. Paying back the amount spent using Credit Cards is a commonly adopted method for increasing your credit score. If the purpose is not getting the reward points and other benefits, your requirement of the card will be distinct to others.

4. The rate of interest

Credit Cards offer you a loan, which you have to pay after a given grace period. A loan is, however, a debt and involves a specific rate of interest. If you pay the amount back in due time, you do not need to pay this extra amount; but in case you fail to return the credited amount, you need to know what exactly you will be paying.

5. The option of secured Credit Cards 

Credit Cards work the other way round too. In such a situation, they are called secured Credit Cards. Students or people will no credit history can make use of these cards, to begin with. An initial deposit is required for these cards, which is refundable when you upgrade to a regular Credit Card.

6. Your repayment habits

If you can easily pay off the credit taken completely every month, you must consider reward cards which offer the options of cashback, discounts on travelling or shopping, and other bonuses. You even earn points for every amount you spend using these cards. The points that will be given away as a reward vary for different Credit Card companies.

7. The annual fee

The first year is a smooth sail for most of the Credit Cardholders. The annual charges are either very low or waived off by the company. Along with that, the welcome gift adds to the pleasure of holding a Credit Card. Second year onwards, the annual fee, as well as the credit limit, may be a matter of concern for you.

8. How often you use the card?

If you do not use something, there is no point in keeping it. The same applies to Credit Cards. The reward points may have an expiration date, and the card when not in use may not offer any value but serve as a liability. Keep a tab on your expenses, but if your financial planning does not approve of a Credit Card, no policy will sound useful to you. If your purpose of keeping a card is only to look after emergency credits, a no-frills card may work best for you. It is easy to maintain; has low-interest rates and negligible yearly charges.

9. The option of EMI

Certain Credit Card companies allow you to convert your big-ticket purchases into smaller EMIs (Equated Monthly Instalments) so that you can pay the amount easily. Ask your service provider if they offer such a facility since it is not a mandatory function for all sort of Credit Cards.

10. The penalties

If you withdraw cash or make a late payment of your Credit Card bill, you have to pay an extra amount for that. Balance transfers or crossing the credit limit may pose an unwanted threat to your pocket. If you cross your credit limit, the company will not deny the transaction, but a penalty will apply for the same.

Other than these, always check the customer care services offered by the company and the security measures adopted by them. The information on Credit Cards may not be available with the bank. You will need to deal with a virtual service mechanism in case of any enquiry or complaint. Choosing the right Credit Card is different from choosing the best Credit Card offers. Know your need, instead of falling for greed.

Also Read: What Information Does a Credit Report Hold

To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.

Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.