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Having a credit card can make your life a lot easier. With quick payments, the option to convert your spending into an EMI, and discounts; credit cards allow for seamless, hassle-free transactions. What’s more, you can also get many benefits that transacting through other modes won't fetch you.
But with so many merchants offering credit cards in the market, it can become difficult to choose the best credit card for yourself. To make this task more convenient for you, we have made a list of features that you can compare and make an informed decision.
However, before we get to this, let's explore whether getting a credit card is the right move for you or not. Here are a few personal aspects that you must consider.
Things to consider for choosing a credit card
There are many personal factors that come into play when opting for a credit card. These include:
Your creditworthiness, in simple terms, is your suitability as a candidate to secure credit. This depends mainly on your repayment history, which includes paying back loans on time as well as timely repayment of your credit card bills.
Before taking on a new credit card, it is vital to develop financial discipline and a monthly budget, which will allow you to be on track with the payments. You must also factor in your liabilities and debts because credit cards are also a form of unsecured loan. Ensure you only take up as much credit as you can easily repay.
Apart from this, credit cards can be a great way to improve your credit score. By timely repayment of your credit card bills, you can improve your past inadequate credit history, eventually boosting your credit score.
Nature of work
Your expenses and way of using your credit card may depend a lot on your profession or personal spending traits. And this influences the type of card and card features you may require. For instance, if you are a business owner, you may choose to get a business credit card for expenses pertaining to work. In such a case, the next question that crops up is regarding the frequency of use. You may be dealing more with cash transactions than using your cards for payment. Hence, it becomes crucial that you analyze your needs and only then select a suitable credit card.
On the other hand, for someone who travels a lot on the job, credit cards can be a blessing. Not only does it allow you to carry your money in the form of a single card, but it is also widely accepted. Moreover, with frequent use, you can accumulate rewards and get benefits in the form of air miles, discounts on hotels, and even shopping vouchers.
If you are planning a big expense, the chances are that credit cards will be your most preferred channel of payment. In fact, if you plan your finances well in advance, you can enjoy significant benefits, primarily in two ways:
Firstly, you can get a discount if the bank has a tie-up with the merchant when paying through a credit card. Secondly, you can create an EMI payment schedule. This allows you to spread the liability of big payments into multiple installments, reducing the financial burden.
In another case, if you are someone who has many swipes on your credit card, you may be looking for some rewards and deals that benefit you. This is a feature you may look for in a card, as it supports your lifestyle needs. However, it is only worth it when you plan to make enough payments through your credit card because reward points accumulate over time and come with an expiry date.
Keeping all this in mind, you can decide whether you want to opt for a credit card. If you do go ahead with this decision, there are certain things you must consider choosing the best credit card for you. Let us see what they are.
What should you look for in the best credit card?
Here are some features to explore while looking for the best credit card:
There are quite a few fees associated with credit cards; however, they are different for all cards. This makes it important for you to compare the charges of each card to get the most economical option. Some of the most common charges that come along with credit cards include joining fees, maintenance charges, late payment fees, and transactional charges for using the card in foreign countries.
The credit limit is the maximum amount that you can transact using your credit card. The credit limit is set by the credit card company and is based on multiple factors, including your age, credit score, repayment history, employment status, and more. You may want to ensure that your credit limit is high enough to accommodate your expenses.
Offers and perks
A major benefit of credit cards is their reward structure. For any amount you spend on your card, you get some points. The conversion is based on a set rate. For instance, for every rupee spent, you may get 4 points. However, 1 point may equal some other denomination of rupee. Once you accumulate these, you can convert them into discount vouchers or gift cards.
You may also get air miles, access to premium lounges at airports, movie tickets, or even cashback rewards! You must get the details of the terms and conditions related to these lifestyle benefits and compare them while selecting the best credit card.
The credibility of the service provider
You must ensure that the credit card provider is credible and has a clean track record. This will help you avoid unwanted situations, and since this is a matter where money is involved, it doesn't harm to be extra careful. Check if the credit card company has prompt query redressal and offers 24x7 assistance.
Can you subscribe to a credit card from a new service provider? Absolutely. In fact, the latest credit cards come with up-to-date features and benefits.
You can assess the benefits offered by IndiaLends and avail a credit card now!
There are some high-end credit cards that give insurance coverage. You can make a claim against the card in case of the death of the holder (known as the death benefit) as well as accidents. Apart from this, insurance cover may be given in case your card is lost on any lost baggage, any outstanding amount, etc.
Loan and cash withdrawal
Many credit cards allow you to withdraw cash using an ATM. The limit for this is a certain percentage of your card's credit limit. This can be a useful feature when you need cash in an emergency. However, it is not the most economical way of withdrawing funds as it adds an extra burden, and any late payment is charged with a very high-interest rate.
Apart from this, you can also avail a personal loan against certain credit cards. You can compare cards based on these two features and the rate of interest that comes along with them.
Having a credit card that is accepted internationally has its advantages. Not only will you be able to use it anywhere in the world, but you can make international transactions more easily. There may be cases where you make a purchase online and pay in, say, dollars. This will be made hassle-free with a credit card accepted in countries other than your native country.
After analyzing and assessing all these points, we are confident that choosing the best credit card will be easier for you. Make sure you read all associated terms and conditions beforehand and always pay your bills on time. Credit cards are a great financial tool if they are used in the correct manner.