How To Choose Credit Card? Factors To Keep In Mind

Credit cards have become a necessary part of our daily lives. Indians are increasingly using credit cards for bill payment, travel and shopping as a result of evolving lifestyles.

However, selecting the best credit card can be difficult with so many options available in the market to meet a wide range of needs of the customers.

When choosing a credit card, you should consider a few key factors like the interest rate, credit limit, annual fees, offers and reward points, among others, to get the best card as per your needs. Let's explore the main considerations you must consider while choosing the finest credit card.

The first step in selecting the best credit card is to determine your spending patterns. Evaluate your monthly spending to figure out which items you spend the most on, such as food, shopping, travel and entertainment. You can use this information to select the best credit card that comes with the best offers and discounts as per your needs.

Interest rates, annual maintenance costs and late payment fees are a few common charges on your credit card that have an impact on the total cost of the card.

The majority of credit cards offer cashback and rewards programmes that balance the annual costs. Many card issuers also waive annual fees on reaching a certain spending threshold.

Analyse the benefits the card provides while taking your needs into account. These could include concierge services, airport lounge access and extra points for special events, which can significantly increase the value of your regular purchases. Premium cards offer substantial benefits but come with an annual or joining fee that ranges from Rs 500 to Rs 5,000.

When choosing a card, the Annual Percentage Rate and interest rate are important considerations, particularly if you have a balance. You can select the most affordable card by comparing the annual percentage rate of various cards. The credit card interest rates can go up to 45% per annum and this may push you into a debt trap in the future. So, comparing interest rates to choose the most affordable card will be a prudent step.

Credit cards offer a variety of cashback and rewards schemes. Learn the different types of rewards available to choose the best card. While some cards offer cash back on eating out, others offer points or miles for travel.

Examine the terms and conditions for earning and redeeming rewards. When choosing a card, do take into account the extra benefits it offers and how well they suit your needs.

Choose a credit card company that offers a paperless application process. These days, major banks let you apply for a credit card online with just a few details, like your email address, PAN number, mobile number and a seamless e-KYC process.

Each credit card has its own set of requirements for eligibility, which vary depending on factors including age, credit score and income. Understanding this can help you choose which cards you have the best chance of getting approved for. It is advisable to review the card's exact conditions before applying to make sure you meet the requirements.

Select a credit card from a bank that has a reputation for receiving assistance promptly and efficiently. If you encounter problems like a lost card or an unauthorised charge on your bill, ideal customer service can be a lifesaver. Efficient dispute resolution and 24/7 customer service can have a big impact on how you manage your card.

Keeping your transactions secure should be your top priority. Choose cards with robust security features, such as fraud prevention measures, chip and PIN protection, and warnings sent directly to your phone.