How to Choose the Right Credit Card

According to the Reserve Bank of India, between May 2019 and April 2020, the number of credit cards in operation grew by 9.4 million, taking the total to over 57.4 million. This is because more and more people are opting for digital payment instead of cash. Also, the concept of borrowed credit which not only helps to pay for your current purchases but also carves an impressive credit history for you, makes credit cards one of the most sought-after financial tools. If you too have been looking forward to get a credit card but are unsure which is the best credit card to get, here is a guide to help you select the best credit card for yourself.

Select the best credit card to use based on your lifestyle

Besides functioning as an efficient payment system, a credit card also works as a lifestyle accessory. Several unique features can be availed on the card depending on the type of purchases you usually make on the card. Choosing a card that matches your lifestyle will help you make the most of your credit card and contribute to bettering your experiences. 

Consider the best credit card options based on your type of purchases

If you are planning to make big purchases on your credit card, it is likely that you may carry forward your balance. In such a case, get a credit card with a low-interest rate. Similarly, you should evaluate the monthly credit limit on your card. If you intend to use your card liberally for dining, entertainment and travel, you should opt for a card with a higher credit limit. A lower credit limit is not necessarily bad and can be considered if the chances of using your credit card are significantly lesser.

Check out the Rewards offered by Top Credit Cards

Rewards are more often than not considered the reason to get a credit card. However, it is wise to ensure that the credits that your credit card helps you earn can also be used by you. Free miles for a non-traveller or dining discounts for someone who never goes out can be worthless. So before signing up for the best credit card take a look at the rewards program and see if it makes sense for you.

Review the different Credit Card options matched to your spends

You can select the best credit card to use depending on the type of spends you make on the card. The different types of credit card options to choose from are as follows-

  1. A cashback credit card- This credit card helps you reduce monthly bills on the credit card by using your earned rewards as a statement credit.
  2. A fuel credit card- This card helps you avail surcharge waivers on fuel as well as get fuel at discounted prices.
  3. A travel credit card- This is the best credit card to earn points for hotel stays and airline miles which can be used to pay when you travel
  4. A business credit card- This is the best credit card to get if you are looking to use the card for making purchases on behalf of your company.
  5. A secured card- A secured credit card is one of the best credit card options to avail if you are aiming to establish or rebuild your credit history.
  6. A student credit card – This credit card, as the name suggests, is made for students and can be used by them to fund purchases during the student life.

Understand the Charges you incur on the best Credit Card

Several charges come with a credit card. It is wise to evaluate all these charges to ensure that your credit card is not asking for more than what you are willing to pay.

Annual fees- This is the yearly charges levied on the credit card. In some cases, the annual fee against the credit card is waived off if minimum spends are achieved

  1. Finance/ Interest charges- Interest or finance charge is levied when you opt for revolving credit which implies carrying forward of balance past the due date.
  2. Late payment fees- If you pay your credit card outstanding dues after the due date, a late payment fee is charged.
  3. Over-limit fee: If spends on your credit card are over your credit limit, an over-limit fee is charged.
  4. Cash withdrawal fee- Using your credit card to withdraw cash at an ATM attracts a charge known as a cash withdrawal fee.

Check Eligibility Requirements of top Credit Cards

Narrowing down on the best credit card doesn’t essentially guarantee that you can get it. To apply for a credit card you need to match the eligibility criteria for the card. Browse through the eligibility criteria and documents required against each credit card to see if you can apply for the same.

If you are still doubtful about which credit card to get and which is the best bank for credit card, you can check out some of the top credit cards offered by the most reputed banks in the country to get a better understanding. There are several online portals too that offers you a detailed view of each of the credit cards- their unique features and credit card benefits. You can compare the different credit cards on the site and select the best bank credit card for yourself.