4 easy steps to selecting the ideal credit card for your lifestyle

Credit cards are of different types that cater to varying needs and preferences. Rather than considering them a one-size-fits-all solution, choose them based on your unique needs. After all, using credit cards can be very advantageous.

 They offer a very convenient mode of payment, enable you to access credit when you need it and help you enjoy cashback and rewards. As such, there are various kinds of credit cards you can choose from, including:

  •       Secured credit cards
  •       Business credit cards
  •       Student credit cards
  •       Standard credit cards
  •       Prepaid credit cards
  •       Rewards credit cards
  •       Travel/Fuel credit cards

 Given the multitude of credit cards available, making a smart choice between them can be a challenge. However, there are certain factors, such as the rewards offered and the fees applicable, which can help you make an informed decision.

 To select the ideal credit card, consider the factors listed below.

Eligibility for a credit card

Before you start shortlisting credit cards, ensure you qualify for them. Every credit card issuer has terms that you will need to meet. Usually, these parameters revolve around your credit score and income.

 Once you know that you qualify for a card, shortlist it and compare it with others based on the factors mentioned below. Remember, if you do not have a credit history, you can opt for secured or prepaid credit cards to start off on your journey to build a credit score.

 Personal lifestyle and spending patterns

Choose a credit card that aligns with your spending habits, needs and requirements. Examining where you spend your money will help you understand the categories that are most relevant to you.

 By selecting a credit card that offers rewards or discounts in areas that you transact in, you can enjoy it to the fullest. For example, invest in a travel credit card if you travel frequently. You will get discounts on fares and stays, complimentary airport lounge access and more.

 Annual fees, interest and charges

Credit cards involve various fees, so you must be aware of the fee structure and charges before finalising a particular card. You must be aware that not paying your full credit card bill by the due date results in not only a late fee, but also interest charges as a penalty.

 Credit card interest can be quite high, so choosing a card that keeps this down to the minimum can help you put your financial well-being first. So, comparing the fees of various credit cards before making your decision is key.

 Some of the applicable credit card fees include:

  •       Interest fee on unpaid dues
  •       Joining fee
  •       Annual fee
  •       Late payment charge
  •       ATM fee on cash withdrawals
  •       Balance transfer fee
  •       Foreign transaction charge

 Credit card companies may sometimes waive off the joining and annual fees for regular customers. You can also get waivers based on your credit score or income. Watch out for these so you save more. 

 Cashback and rewards

Instead of focusing on one or the main advertised benefit of a credit card, try to understand the rewards programme in depth. Some questions that can help you include:

  •         Does the card offer cashback or discounts only when you purchase from specific platforms? Do you use those platforms?
  •         Do you shop or stay at the other partners of the issuer?
  •         Does the credit card give you points for online spends?
  •         What are the limitations or exclusions when it comes to rewards?
  •         Is there a fee you need to pay to redeem reward points?

 By equating a credit card’s rewards with your lifestyle and spending patterns, you can get the most value from it. Ensure that you also consider the associated fees, as sometimes, big benefits may come with higher annual fees. A cost-benefit analysis can help you make a smart choice.

 As you can see, the most significant step to finding the most appropriate credit card is to go over its features, benefits and fees. By assessing these factors based on your usage and comparing them with your shortlisted cards, finding the ideal card is much easier.

 Whether you are looking for low interest rates, cashback, rewards, or other benefits, you can easily compare various credit cards from top issuers on the Bajaj Markets App. Simply download the app from Google Play or the App Store today to apply for the right credit card in a click!

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