Credit cards are one of the best cash alternatives in the modern era. They are a great medium to improve your credit ratings and offer ease of use and repayment. Moreover, credit cards come with attractive cash backs, offers and joining bonuses that would help you reduce your overall cost of purchases. So, if you are planning to apply for a new credit card anytime soon, make sure to opt for the one that meets your lifestyle and spending habits.
Here are the things that you should know about your credit cards:
1. The card issuer and the processing network: You must know the processing network of your credit card which are namely Visa, MasterCard, American Express, and Discover. Many credit cards also have the credit card issuer’s name printed on the front of the card. You can also take a look at your billing statement or at the back of your credit card to learn who issues your credit card.
2. Annual fees: Few credit cards are free for a lifetime but there are cards which come with an annual fee as well. There are also a few cards that have no annual fee for the first year such as Axis Bank My Zone card. The bank charges a second-year renewal fee on such cards. If the purpose of your credit card is basic in nature then opt for the free lifetime credit card. But if most of your expense depends on credit cards, then it makes sense to go for the annual fee credit cards only. These annual fees cards come with attractive cashbacks and offer and help you save money.
3. Credit card interest rate: It’s important to compare the interest rate offered on credit cards before choosing the one. Ideally, you should choose a credit card which has low-interest rates, lowest fee, and maximum benefit. Always make sure to choose the credit card as per your needs and priority.
4. Facility of EMI: With the help of credit cards, you can choose to make equated monthly installments (EMIs) if you wish. This can be helpful to you as you aren’t required to pay a lump sum for the purchase made. It’s always better to pay through EMIs rather than applying for a personal loan to make that huge purchase.
5. Your credit history: Your past credit history matters a lot if you are planning to apply for a credit card. CIBIL reports are checked to know your credit history before you are issued a credit card. This report also reflects if you have taken any other loan such as education loan, personal loan, car loan, home loan, etc. It also reveals that whether you have made timely payments in your loan or not. The CIBIL report reveals your current credit score. You must have an excellent credit score in order to apply for a credit card.
6. Purpose of credit card: It’s important for you to understand the purpose for which you are applying the credit card for. Different banks offer a wide range of cards on the basis of your spending habits and lifestyle needs. So, if your purpose is to primarily spend on movies, dining, and shopping, then you can choose the credit card which has maximum benefits pertaining to that area specifically.
7. Compare joining bonuses and rewards: Many credit cards offer attractive joining bonuses and welcome benefits in the form of bonus reward points and vouchers. Make sure to check for the expiration date of your reward points. While some credit card issuers offer reward points for a period of 2-3 years, there are some whose reward points never expire. Therefore, make sure to check bonus and reward points while comparing the various credit card options.
Hence, if you are planning to apply for a credit card anytime soon, make sure to keep the above-mentioned points in your mind to make an informed decision. Compare interest rates and cashbacks offered by different lenders and apply for the one which suits you.