5 Tips to Find an Ideal Credit Card

Updated on: 03 Jan 2024 // 3 min read // Credit Cards
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Without an iota of doubt, Credit Cards have become the preferred mode of transaction for many of the salaried and business individuals. They not just provide us a cashless payment medium but also offer us the flexibility of repayment.

However, with the availability of sky-full of Credit Cards nowadays, it has become extremely difficult to find one that suits your needs in the best way. It is important to keep in mind for which purpose you need a Credit Card such as – for saving on interest repayments, enjoying the benefit of repaying in instalments, earning attractive cashback, or utilizing other benefits.

When you are sure about your needs, follow the tips mentioned below for deciding which Credit Card is best:

1. Analyze Your Pattern of Usage

Analyze your spending habits! Do you pay monthly mobile bills or utility bills? Are you a frequent shopper? Do you travel by flights often? Considering these factors majorly influence your Credit Card choice because these habits directly determine your monthly interest outgo on an unpaid bill.

If you can pay monthly dues in a disciplined way, you don’t need to worry about the interest on unpaid amount or late payment charges. In that case, look out for a card with zero annual fees and longer grace period that comes with cashback offers and reward points.

If you feel that there could be a delay in payments, enroll for a card that provides the flexibility of carrying your existing balance forward to the next month at minimum charges or a card that comes with the lowest interest on the unpaid amount.

For those who don’t use their card frequently or hold multiple cards, opt for a no-frills card with no annual membership fee and low-interest rate.

2. Pay Heed to the Credit Limit

With daily expenses reaching sky high, everyone is looking for Credit Cards with Higher Limit to help them meet any unexpected expenses. Moreover, having a low card limit can lead to max out situation which can drastically pull your credit score down impacting your future borrowing eligibility. Hence, pay utmost importance to the credit limit before finalizing a card. Also, it is advised to plan your expenses beforehand so as to restrict your unnecessary expenses within card’s limit.

3. Consider Interest Rate

The interest rate is the most important factor to be considered when choosing a Credit Card, especially for those who often miss paying their Credit Card bills. Credit Cards come with two types of interest rate – fixed interest rate and variable interest rate.

The interest rate may vary depending on user’s credit limit and payment history. Don’t forget to read the clause relating to the APR (annual percentage rate) in the terms and conditions document of your card.

Do you know that some banks offer lifetime free Credit Cards that come with no processing fee and annual charges? Make sure you are aware of all the factors before purchasing a Credit Card so that you can negotiate for a low-interest rate.

4. Be Aware of Penalties

To maintain a good rapport with your Credit Card issuer and get multiple reward points offers, you need to be a disciplined card user. For that, make sure you do not default on any payment. Card issuers levy heavy penalties on non-payment to prevent the card holders from repeating defaults. Also, go through their terms and conditions document before deciding on a card.

5. Look for Attractive Offers

Does your card offer cashback or reward points for each spending? Are there any partner hotel chains, flights or retail merchants where you can get discount on your every purchase? Many Credit Cards come with these benefits nowadays. Research before choosing a card to make sure you have got the best deal as per your requirements.

With these considerations in mind, we hope you will find the best-suited Credit Card for your needs to make your life simpler.