How do I choose the Credit Card best suited to my needs?
September 24, 2020
India’s payment industry is wide in scope and full of numerous benefits for consumers. While there exist a number of digital payment apps, mobile wallets, UPI facilities, and more such cashless modes of payment, Credit Card still remains one of the more popular options, due to the several customised benefits they offer to consumers.
While each Credit Card comes with its own set of unique benefits, one must choose a card tailored to their specific needs and usage patterns. One would need to compare cards on various parameters in order to determine the best Credit Card for them. Some of the parameters to take into consideration are:
- Spending habits: Different Credit Cards suit different sets of spending habits. How you plan to make use of your Credit Card can play a significant role in determining which card you should opt for.
- If you aim to use the card primarily for shopping, then you should choose a card with the best reward programmes and a high credit limit.
- If you’re aiming to build your credit score and pay the bill in full every month, then it is advisable to choose a Credit Card with no annual fees and a generous grace period.
- If you aim to use your Credit Card in the case of emergencies only, then it is advisable to go for a no-frills Credit Card with a low-interest rate and low fees and charges.
Thus, one’s spending habits should be factored in while settling on the best Credit Card option.
- Interest rate: While some banks come with a uniform rate of interest that applies to all cards, others come with different rates for different cards. The interest rate levied can also vary depending on each individual’s spending patterns.
Your interest rate is calculated as an Annual Percentage Rate (APR) and Monthly Percentage Rate (MPR). One should look for each card’s respective MPR and APR. Additionally, all Credit Cards offer an interest-free period, which is generally a period of 20- 50 days, depending on the card you opt for. One should also keep in mind this interest-free period when selecting their preferred card.
- Fees and charges: Additional fees and charges, apart from any applicable interest, may be levied directly or indirectly. Some of these fees and charges would include a joining fee and an annual fee.
- Joining fees: The joining fee for the premium and super-premium Credit Card categories will generally be on the higher side. Certain cards come with no applicable joining fees; however, it is likely that such cards would come with other restrictions.
- Annual fees: While an annual fee may not be levied in the first year of Credit Card purchase, it will likely be levied the second year onwards. Annual fees generally range from Rs 100 to Rs 8,000. Cards bearing the ‘LTF’ or ‘Lifetime Free’ sign will not levy any annual fees. One should keep an eye out for such cards.
Those transacting above a specified limit may have their joining/annual fees waived entirely.
- Incentives: To attract new customers and to retain existing customers, every Credit Card company offers the best rewards upon repeated usage of their card. Good Credit Cards provide benefits ranging from cashback offers to reward points that can be used to redeem a variety of items. Your reward points can be redeemed in a number of forms and ways, including but not limited to, air miles, bill payments, gift vouchers and even direct credit to account.
A customer must also keep in mind that the rewards offered by credit companies have an expiry date and they should redeem reward points within the time period.
- Sign-up bonus: Some Credit Card companies offer a sign-up bonus for new customers. To avail of this sign-up bonus, the new customer may need to fulfil some criteria, such as spending Rs 10,000 in the first month or similar conditions. So, one should choose the Credit Card which offers the best Credit Card offers upon sign-up.
- Credit limit: A credit limit is also one of the most important factors to look for when selecting the best credit card. Your spending habits would generally determine the credit limit applicable to you. One should also make it a point to understand the penalty charges that comes with overstepping your credit limit.
Thus, there exists a variety of Credit Cards, each with their own set of perks. Some of them offer multiple benefits like low APRs, sign-up bonuses, zero annual fees, maximum cashback on transaction and others. One should select what works best for their individual needs, keeping in mind the above parameters.
To avail of a maximum number of perks and benefits, you can consider applying for a Credit Card online from ICICI Bank with a simple 3-step process. You can enjoy amazing discounts on movies, shopping, petrol pumps and restaurants as well as travel benefits such as airport lounge access. In addition to this, you can also receive a variety of cashback offers and personalised deals.
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