Probably until now you haven’t cared to check the credit card offers in your mailbox or to speak to the bank representative who was trying to tempt you with their credit card benefits. But as you’re checking out this article, you definitely need to expand your credit line with a new account. It can actually be confusing when you see lots of offers in the market, as which one would be better. It’s always nice to take your time to carefully review the offers before choosing the best credit card that suit your requirements. Check out these five essential tips for choosing or taking a credit card.
This is most influential factor to assess whether it is worth to possess this particular card or not. As many companies charge huge rate of interest on credit allowance, it is important to ascertain the interest rate and whether it would be fixed or variable. From time to time, companies also offer promotional rate of interest, wherein the first interest charges are lowest and higher interest rates are charged for the remaining balance. Accordingly you must check your usage and evaluate that you actually need this card at this rate of interest or not.
Companies also charge annual fees for possessing credit card. At times, even if you don’t use your card, you are liable to pay its annual fees. A credit card may or may not have an annual fee, an application fee, an account service charge, an over-limit fee, a late-payment fee, cash advance fee, and other miscellaneous fees. Banks where you already have your current/savings account, sometimes offer credit cards with no annual fees. It is better to confirm it beforehand. You must understand the terms of payment clearly to avoid getting duped in the future.
Rewards & Cash Back Schemes
Companies often offer reward point system for each transaction with your credit card. Sometimes you can exchange these points for free gifts, movie tickets, refuelling for certain amount and like that. They also tempt you with cash back schemes, like after every Rs. 2000 spent on your card, you will get Rs. 100 back. Before giving in to these schemes, make sure to check out – are these rewards are difficult or expensive to earn, do these reward points expire or till when we have to use them, are these rewards offer something you can use or not, etc. If considered cautiously, reward points can be a great resource to your flexible budget.
Flexibility to Change Billing Date
Check out if the card offers a standard monthly billing cycle or not. It is necessary to know the payment date which is directly linked with the billing date. Depending on your spending pattern and your salary cycle, you must decide on a suitable billing date. Some cards call for payment in every three weeks. It is always better to opt for a credit card which is flexible with regard to changing billing date.
Convenience & Mode of Payment
Everything comes with a certain price. Likewise, all cards boast of different features and uses. Some credit cards give access to amazing additional services, while some offer other rewards with added convenience perks to encourage spending and create a sense of loyalty. Before you opt for a card that probably sounds great in all the right areas, consider these conveniences – the option of paying by phone/e-mail/online, 24/7 customer service, international assistance for no extra charge, free account alerts and plenty of ATMs.
Choosing the right credit card needn’t to be a prompt decision. You must take your time to go through all the terms and conditions carefully and clear your queries regarding anything that is ambiguous, and make sure that all factors are favourable as per your financial requirements and lifestyle.