How to Choose a Credit Card


The urge of leading a better life has increased with the current generation. There are new gadgets apparels, bikes, cars and many more consumer products that are introduced every year, kindling the users’ interest! People wish to own them to improve their standard of living. And there are the festival seasons that brings on lucrative offers that cannot be resisted! So when you don’t have the required funds to buy the things that you crave, credit cards can just be the apt solution.

Though the credit cards might bring light into your life, they also have the ultimate power to leave a big hole into your wallet. This happens when you blindly choose a credit card without knowing how it actually works! So in order to enjoy a credit card’s maximum benefits, you need to consider the following features.

  • Annual/Joining Fee: While most banks offer entry level credit cards for free, these fees are still levied on the high end credit cards meant for businessmen. If you happen to pay your card balance each month, then these fees will make it expensive for you to use the card. In this case, it makes more sense to opt for the card that doesn’t charge any such fees.

  • Credit Limit: If you are a heavy shopper, always select the card offering you the highest credit limit. It will prevent your card from being rejected due to insufficient credit limit.

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When going in for a Credit Card, the first thing you need to check is the cost. Low cost Credit Cards are low on rewards. Since these cards are low on rewards, the processing fee and annual fee should be minimum. If you are opting for a secured card, take the one with the lowest security deposit. If you choose low interest rate Credit Cards for debt clearance, try answering these questions:

What is the period of 0% APR? If you are considering clearing your debt through a balance transfer, then check the 0% APR period of the Credit Card. If you can’t clear your debt within that period, make sure that the APR rate is low

Are there different APR rates for different uses? Generally, a Credit Card might have a 0% APR for old debt clearance but might charge you a high interest rate for all new purchases.
Is there any limitation on the balance type and balance amount that could be transferred? Some cards impose conditions such that only a certain kind of debt and only a certain amount of balance can be transferred.

Any rewards to offer? Though offers and rewards are not your priority, it is good to know if the card offers rewards. If you choose Credit Cards that are high on discounts and rewards, try answering these questions:

What do I spend most on? Depending upon the answer to this question, you can decide what kind of rewards card you should opt for. For eg: If you are a travel junkie, then opt for Airline Credit Cards that give Air Miles.

What is the reward policy? Some cards have loyalty tiers and spending caps that give out offers and rewards to only customers who use the card often and have spent a considerable amount of credit on the card. Opt for cards that give offers and rewards with a low spending cap.
How much are the rewards worth? Check if the rewards like cashback, discounts, etc. offered by the card are worthy enough to warrant Credit Card expenditure.

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BB Expert