A credit card is an incredibly useful financial asset that offers you instant access to credit for a specific time while doing away with the need to carry cash. Several types of credit cards are being offered to suit the varying needs of people. Choosing the right type of card is important for you to meet your funding needs and reaping the various benefits offered by it. Here we talk about the various factors that should influence your credit card choice.
- Purpose: The first consideration in choosing a credit card is the purpose for which you need it. You may be requiring a credit card for online shopping or a holiday or to pay your bills or buy costly items and spreading their cost. You can accordingly choose a travel card that offers discounts on flight and hotel bookings or access to the airport lounges. Similarly, if you need to buy a credit card for purchasing fuel regularly you can go for a fuel card.
- How Soon You Need It: The credit card approval process involves verification of the information submitted by you besides a review of your credit scores. But if you need a credit card urgently, you can apply for an instant credit card. The approvals for these cards are fast-tracked but you may still have to wait for getting the physical card before you can use it.
- Your Ability to Repay Dues: Whether you intend to repay the due amount every month or spread repayments over a periodis important. If you intend to pay the total due amount on time every month, you can take advantage of the interest-free period. This means you need not worry about the interest rate being charged by the credit card issuer on the overdue amounts. In case you plan to spread your repayments over a period, the interest rate on a credit card is an important factor to consider.
- Annual Fee of the Card: Some banks charge an annual fee for the use of the credit card. Other charges may also be applicable on cash withdrawal, transactions in foreign exchange or some other type of transaction. You can reduce your costs by choosing credit cards with no annual fee.
- Reward Points and Their Expiry: Credit cards come with a lot of advantages including reward points on transactions. But in most cases, these reward points expire after two to three years. So, while looking for a credit card for yourself, search for a product one whose reward points have no expiry. Also, do check where these reward points can be used and how beneficial they are for you.
Before you submit your online credit card application, do check the terms and conditions including the annual fees and other charges. You should also check about the various offers and their validity before finalising a card for yourself. Choose a card that helps you meet your needs and offers you the maximum value.