Whether you are accustomed to eating out often, or shop and travel a lot; the regular use of a credit card not only spares you from the need to carry cash or a debit card all the time, but also offers an array of benefits in cash and kind.
Before you apply for a credit card, it is advisable to make sure that you have made note of all the salient factors that matter.
Here we give a lowdown on the key factors that determine whether a credit card is worth applying for:
Interest rate: It is common knowledge that credit cards charge an exorbitant rate of interest on outstanding amounts. The rate of interest can range between 2.5 to 3 percent per month, making it 30 to 36 percent per annum.
So, one should opt for a credit card that charges an interest rate on the lower side of the spectrum.
Partner bank: There could be occasions when you would have to coordinate with the representatives of the bank that has issued the credit card.
So, it is highly recommended to go for a bank that is known for its customer support services. One should, therefore, opt for a reputable bank that has a large customer base.
These banks usually have a well-functioning customer service department.
Reward points: Higher the reward points, higher the cash backs and other benefits. Although this should not be on top of the priority list, this can be one of the things that you might want to consider at the time of choosing a credit card.
For travellers or foodies: Certain credit cards cater to those who eat out a lot, whereas some are beneficial to frequent shoppers. So, it is vital to see if the credit card aligns with your spending pattern and preference.
For instance, if a credit card offers a cashback of ₹500 for every flight ticket but you are a sporadic traveller, it does not lead to any significant savings.
Annual charges: These charges which banks charge are minimal, but they can still add to a significant amount, particularly when you use multiple credit cards.
So, lower the annual charges, the better it is for your pocket. Some credit card companies waive off annual charges if the card’s annual expenditure crosses a threshold. Needless to say that such cards suit the ones who spend a lot via their cards.
To sum up, consumers can choose a credit card based on their regular usage be it shopping, air tickets, restaurants, fuel charges. Most cards have common features whereas a few offer extra benefits over and above those features.
So, it is ingenious to opt for a card that not only offers those common features but also gives a few extra goodies. Don’t you agree?