Using credit cards is fast becoming a trend that almost everyone over the age of 21 wants to try out. In the haste to begin using credit cards, eligible applicants often end up applying for a trending card. Not many focus on learning how to select the right credit card while applying for the first time.
Credit cards can help us in building credit history if used appropriately and can even destroy the same if not used wisely. Therefore, a credit card applicant needs to know every aspect related to a credit card before applying for it. Various factors such as discounts, cash backs, offers, charges, fees, services, payment options, terms and conditions, credit limit, etc that one must consider while selecting the right credit card for the first time.
Here, we will discuss some of the important aspects that credit card applicants should consider while selecting the right credit card.
Is a credit card necessary?
Most first-time credit card applicants believe that learning about the card features and benefits is enough while applying for it. However, before applying for a credit card, it is important to self-analyse your specific needs and expectations from a credit card.
Always begin by asking if you need a credit card. Here are some of the points that can help you in self-analysing the need for a credit card:
- Building credit scores
Many individuals prefer to choose a credit card that can help in improving their non-existent or poor credit history. Those who have a positive credit score may apply for cards that can help in increasing it.
- Rewards, cashback and discounts
Most credit cards offer discounts and cashback offers on flight tickets, online shopping, hotel bookings, etc. Therefore, if you want to earn cashbacks and reward points along with discounts then you must opt for a credit card that offers a maximum of these benefits.
- Access to funds
If you wish to purchase a big-ticket item and are unable to gather sufficient funds for it then a credit card may help you in purchasing it. Hence, you must choose a credit card that can offer more credit limits with which you can make such purchases.
- EMI option
Some credit cards provide an EMI option for purchasing expensive goods or services. Choosing a credit card with EMI options and no extra interest can prove beneficial for certain needs. Therefore, it is important to always analyse your needs before picking the right credit card in India.
Additional read – How to apply for a credit card
What are the factors to be considered before selecting a credit card
Some of the important factors that can help you select the right credit card are:
- Annual fees and other charges
If you are applying for a credit card for the first time then you check the card’s annual and renewal fees. It is also important to go through the criteria for waivers on annual and renewal fees. Waivers mostly depend on your spending pattern. Thus, analysing your expenses and then selecting a credit card can prove helpful.
Also, check if the below-mentioned charges are applicable on the card –
- The interest rate charged on the balance amount due
- Late payment charges
- Cash advance charges
- Duplicate statement fees
- Foreign currency markup fees
- Charges on cash withdrawal
- SMS charges
- Balance enquiry fees
- GST
- Credit limit
Every credit card comes with a different credit limit and this is based on one’s income. So, before applying for a credit card you must reach out to the bank’s representative and request the maximum credit limit that you avail of according to your income levels.
- Available offers
Consider all the available offers on the credit card of your choice. If you enjoy frequent travels then go for a travel credit card and if you love shopping, you must select one which has the best offers on shopping. There are different kinds of credit cards with different benefits. You must go through the various categories of credit cards and then select the best offers that you can make the most of.
- Terms and conditions
After viewing all the offers you must see all the terms and conditions related to those offers. Make sure to review the validity of a credit card offer before choosing it so that you are not disappointed later.
Additional read – How much of a CIBIL™ score is required for a credit card
Use the Tips to Find the Best Credit Cards for You
With the help of the above-mentioned tips, you can easily choose the right credit card that can help in building your credit history over time. Always ensure to take a self-assessment of credit card requirements before applying for a credit card. Instead of being confused about the right card, go through the chosen card’s specifications like fees, charges, payment options, prevailing offers, etc to be aware of the card’s characteristics.
