While Ram had a rich lifestyle – he was the owner of 2 credit cards. Most of you might think, why, he by no means would need debt for his day-to-day expenses, after all, he is rich? But the secret behind him having credit cards is much more than taking debt, having a credit card has become a luxury because of the amazing benefits and comfort it provides to the user. If you also, just like Ram wish to get financially empowered by choosing the right credit card, then we assure you you’re at the right place. We bring to you 5 factors that you should consider while apply for credit card. So, let’s start:
5 Factors that you should consider when applying for a credit card :
- Annual Percentage Rate (APR): The rate of interest that you pay on the borrowed money using a credit card is known as the annual percentage rate. It is mostly stated as a yearly rate. If you are financially disciplined and you pay your bills on time then you don’t need to worry much as it is only charged if the card user fails to pay the amount on the due date, but in case you forget to pay your bills on time then you need to be very careful while choosing the credit card and should choose the one with lowest APR otherwise you may land yourself into a cycle of high-interest charges and debt.
- Fees: Different types of credit cards charge different types of fees, therefore, before you choose a card, you should make sure that the fees that you are paying should not exceed the number of benefits you are getting. The most common fees that banks charge are annual fee which is charged once a year or month, returned check fee which is charged when your check bounces before your account does not have a sufficient balance, late fee which is charged if a user is unable to pay the bill before the due date and cash advance fee which is charged if you take out cash from a credit card.
- Rewards: Different types of cards offer different types of benefits to their users, therefore it’s upon the users to decide which reward adds maximum value to them. The most common form of rewards are reward points or loyalty points which are given to users on every expenditure they do by using the credit card, these can be redeemed later to buy specific products and services, and Cashback where your money is refunded to your account depending upon how much you spend.
- Eligibility: Different credit cards have different eligibility criteria like some have good credit score requirements and some don’t. The person applying for the card should make sure that he/she checks the eligibility before applying and apply only to the ones he/she is eligible for to avoid unnecessary trouble time wastage.
- Your budget and spending habits: Some credit cards may seem lucrative before the number of benefits they offer, however you need to make sure that you choose a card that maximizes your reward while aligning with your budget and spending habits. For example, in case you buy expensive items then you need to make sure that the card offers a high credit limit whereas if you do online shopping frequently then you can choose a card that offers cashback or reward points. Also, some cards have a minimum limit on spending to enjoy rewards, which may trick you to buy more than your budget, you should avoid such cards if they don’t go with your spending habits and your budget.
Where on one hand the right type of credit card can boost your financial happiness, a wrong type of credit card may land you in unnecessary trouble, hence, choosing the right credit card becomes extremely necessary for every person before applying for a card. After learning about the 5 important factors that you need to take care of while choosing the right card, it’s the right time for you to make a smart choice just like Ram and start your journey of comfort and convenience by choosing the right card amongst the best credit cards in India for a financially empowered you.