Choose the Right Card And Maximize Your Benefits
To choose the right credit card for you is subjective- it depends entirely upon your credit situation and spending habits. No credit card is exclusively better over other cards. Different companies offer credit cards depending upon the needs of the customer. You can judge your credit worthiness depending upon the following factors:
Low Rate of Interest
If you are planning to make big purchases and carry the balance forward to coming months, you must apply for a card with 0% introductory Annual Percentage Rate or APR or at least a credit card with a low rate of interest. Such cards offer low APR in the beginning, which increases after a certain period. This is beneficial because you can get some time to repay your bills without paying any interest. While considering such a card, you must enquire what the regular APR will be after the introductory APR expires.
Earning Cash Back
The cash back cards in India have just begun earning popularity because of two main reasons:
Renewal fees/ annual fees
Terms and conditions attached with cash back cards:
- You have to spend a particular amount to earn cash back. For instance, to earn 5% cash back on petrol, you have to spend, say, Rs. 1000, which may be higher than you normally spend. In case, you spend only Rs. 500 every week, you may be compelled to spend more.
- You must evaluate your spending habits before opting for a cash back credit card.
MasterCard/ VISA payment systems
You must have seen logos such as Master Card/ VISA/ Maestro/ American Express, etc. on credit cards. These payment systems process reimbursements between issuer bank and merchant bank. MasterCard and VISA are the two major payment systems of the world. If you are going to get your first credit card, you must make sure it’s one of these. You can also take the benefit of several cash back and discounts offered by them. However, before you make a purchase, you must evaluate the funds earned versus funds spent.
- This is another major criterion to evaluate a credit card with others. Reward points are the indirect discounts you earn on your purchases. For every purchase you make, you earn some reward points, which can be redeemed later to make more purchases free of cost. In other words, when you collect, say 5000 points, on your credit card, you can redeem these points to shop at certain outlets.
- If you are a premium customer of the bank, you may have to collect lesser reward points. If you are a regular customer, you are required to gather more reward points.
Flexibility of Billing Cycle
- Most companies disburse the salaries by 7th or 10th of every month. However, a few companies may delay this date. In such cases, you must seek a credit card company, which offers flexibility to choose your own billing cycle.
EMI Free of Interest
- Banks such as ICICI, HDFC, and Citibank offer great system of EMIs free of interest. If you make regular purchases of expensive things such as electronics, travel, you can buy a card, which gives options of reimbursing the EMIs interest free at an interval of three, six or nine months. Even if you are capable of making payments in a lump sum amount, you can use this facility to build your credit history.
Bill Payment Options
- There are several methods of bill payment options when your credit card statement arrives. However, different modes of payment are suitable for different classes. For instance, even if the bank allows payment by NEFT, one may not be very comfortable with it since one is not comfortable with online banking. If you like paying by check drops, you must locate a nearby bank branch or ATM is located near your office or home.
In the nutshell, you must buy a card depending upon your requirements. A few things that you must keep in mind are:
It’s usually a good thing to get a card from a major bank like, Citibank, ICICI, or SBI. Make sure it is a VISA or MasterCard branded card, and most importantly – make sure the card benefits are something you can take advantage of with your spending style!