It will not an exaggeration to say that credit cards are akin to one’s lifeline to their financial world. These small pieces of plastic have more or less dominated the financial space and have redefined what it means to spend. Credit cards, ever since their introduction have resulted in a number of individuals having access to products to services that were previously not possible. Although credit cards act like short term loans and require individuals to spend money that is technically not theirs, it can help individuals plan their financials better while ensuring that they receive the benefits offered by the said card and availing the products and services that they could not have otherwise procured.Here You can compare and apply credit card through online.
It is by no means wrong if one was to say that customers are spoilt for choice when it comes to credit cards. The sheer number of cards on offer is enough to make even the most jaded of customers squeal in joy. Almost every bank and financial organisation today provides a plethora of credit cards. Platinum credit cards, gold credit cards, credit cards with AirMiles offers, cards with offers related to shopping or dining, there is a whole lot to choose from. But too many choices can also confuse a customer. Would it be more prudent to procure a card that comes with dining offers or go for one that is basic but with less interest rate? Is it safer to opt for credit cards that come with low annual fee or one that has a Reward Points program but higher fee?
In order to help individuals out, we have put together a list of points that should be taken note of while availing credit cards. The tips will enable individuals to choose the best credit card for them based on their needs and requirements.
Research and Compare
This is singularly the most important tip that individuals will have to keep in mind while deciding to purchase a credit card of their choice. Firstly, one must start off by looking at all the credit card options that he/she was interested in to begin with it. Weigh the pros and cons. Which one has better offers and is worth the annual fee? Is the credit card from a reputed provider? What are reviews given by people, is it positive or negative? Are the offers provided by the said credit card even useful? What are fees and charges applicable?
Narrowing down the list of available credit cards is important so that individuals can weigh their advantages and disadvantages and decide based on that.
Eligibility and Credit
Before availing the selected cards, individuals will have to first check their eligibility and also their credit score. Credit scores are available online from the right platforms. However, if individuals have no credit score as of yet, their annual salary and income will be the deciding factor. Better the score or report, better is the chance of receiving a good card with great offers. One of the important aspects that banks or companies check prior to giving credit cards is if the individual is able to repay the amount. This factor is crucial. If a bank gets the impression that an individual will face difficulty in repaying the amount charged to the credit card, it will not give that particular credit card.
Therefore individuals must ensure that their credit history is clean and that they do not have piled up loans or unpaid bills. To know more about Sbi Credit card eligibility.
Type of Credit Card
There are a plethora of credit cards, as mentioned previously and it is not easy to choose the right kind. However, broadly credit cards can be classified into the following categories-
Credit cards that provide rewards
Credit cards that can help save money on interest
Credit cards that help to improve credit when it is damaged
Certain cards have all the above features but mostly it is dependent on the needs of the individual. If the individual in question travels frequently, is it always better to purchase a card that provides travel offers, discounts on hotels and dining, fuel surcharge waiver, and so on. However, it would be pointless for an individual to purchase the above card if he/she rarely steps out. Although introductory offers may seem advantageous, it does not make sense to purchase a card just for that reason. Credit cards that are beneficial to the customer in the long run will have to be availed. Also low rates of interest is always an advantage. Hence balance transfer or low interest cards are highly recommended.
In case an individual has made some not-so-good decisions financially, he/she can avail a credit card that can provide enough opportunities for that person to get the credit score and reports back on track. Cards that can help are secured credit cards or student credit cards.
This is perhaps one of the most important factors when it comes to choosing the right kind of credit card. Is the potential cardholder an extrovert who loves to check out every restaurant in the vicinity or does the person prefer shopping online in the comfort of his/her home? Does the individual travel a lot and hence would prefer offers that are related to travel, hotel discounts or even fuel surcharge?
The above factors will determine the the type of credit card that is to be availed.
Credit Card Features
Credit cards come with a number of features such as-
Minimum Repayment – In case individuals do not pay their balance or unable to pay the entire amount at once, they have the option to pay a minimum amount. This varies from card to card. However, paying just the minimum balance amount is not recommended as this will just result in the individual getting deeper into debt.
Annual Percentage Rate – This the cost applicable on borrowing from the card, if the balance is not aid, Each card comes with a different Annual Percentage Rate. Individuals will have to look into the Annual Percentage Rate of the card prior to availing it.
Fees and Charges – Certain cards have a fee for each year of usage, others waive the charges if a certain amount is spent on the card during the previous year. This fee will added to the due amount and there will be interest charged on fee as well, unless the balance is paid off in full. Cards may also waive their joining fee. Credit cards that come with a number of privileges also charge a high fee. Hence individuals will have to decide if the extravagant fee is worth the benefits and rewards.
Cashback and rewards – A number of credit cards provide offers that allow customers to receive cashbacks based on the offers and the amount spent. Also Reward Programs are usually a part of all cards. This is when individuals spend a certain amount and in return they will receive Reward Points which can be redeemed for gifts and advantages. Individuals will have to decide if all the benefits and rewards are necessary or advantageous for them. By doing so, they will be able to determine the card that is necessary for them.
In this way, customers will have to look around, weigh all the positives and negatives of the card against the lifestyle they lead and their necessities before deciding on a credit card. A number of cards provide great introductory discounts and offers, however in the long run, this may not be necessary. Balance transfer is another option that individuals can look at while availing their credit cards. In the ideal world,the perfect credit card will have to be a blend of low fee and rate of interest along with advantageous benefits and Rewards. Therefore choosing the perfect credit card is a careful process and requires a lot of consideration. Keeping the above tips in mind, individuals will be able to choose the most suitable credit card for themselves.