Picking the right credit card can be overwhelming, particularly if you’re a beginner. With numerous offers, perks, and terms, how will you decide which credit card is best suited for your lifestyle? This guide will guide you through the fundamentals of credit cards. This will also reveal to you what to consider when selecting the best credit card that aligns with your expenditure habits, requirements, and objectives.
Begin with Knowing Your Lifestyle and Expenditure
Begin by considering where you are spending the majority of your money. Do you like to travel a lot? Do you frequently make online purchases or eat at restaurants? Certain credit cards have particular rewards or cashback on certain categories of spending. Your daily routines will assist you in selecting the most appropriate credit card that provides you with maximum utility for your buck. For instance, if you want to earn while you spend, a rewards or cashback card could be the best fit for you.
Types of Credit Cards in India
There isn’t one best credit card for all. Cards are made for various lifestyle requirements. Let’s find out the most popular types found in India:
- Rewards Credit Cards
These cards award you points for each purchase. You can then cash in these points for a range of rewards, including discounts on flights, gift vouchers, or merchandise. If you make purchases on a regular basis and wish to receive something in return, a rewards card may be the best credit card for you.
- Cashback Credit Cards
With such cards, some part of your spend gets returned as cash. Let’s say you spend ₹1,000 and earn 5% cashback. You save ₹50. It’s a good choice for straight savings and not piling up points.
- Travel Credit Cards
If you are a frequent traveller, a travel credit card may be able to provide you with huge advantages. The majority of these have advantages such as air miles, hotel savings, travel insurance, and one of the most sought-after features — airport lounge access. These airport lounges offer a serene atmosphere, free meals and refreshments, and free internet before boarding your flight.
- Secured Credit Cards / Credit Card Against FD
For people who are new to credit or do not have much of a credit history, obtaining a normal credit card may prove difficult. This is where a credit card against an FD comes into play. A credit card against FD (Fixed Deposit) involves you depositing a fixed amount with a bank, and they provide you with a credit card and a credit limit, typically a percentage of your FD value. It’s a great way to establish your credit score responsibly. After making steady payments on your credit card against FD, you can then apply for regular, unsecured credit cards in the future.
Features to Compare Before You Apply
Below are some things to check before choosing your best credit card:
- Annual Charges: There are no annual fees on some credit cards, while others do. Compare the benefits with the annual charge. The card with a fee may provide great rewards or benefits that exceed the charge and make it the best credit card for you.
- Interest Rate: This is the amount you pay if you don’t pay your entire credit card bill on time. It’s always better to pay the entire amount before the deadline. Nevertheless, it’s good to know the interest rate, typically between 30% and 40% annually in India, just in case you ever have to pay later.
- Reward Rate: This indicates the amount of value you receive from rewards or cashback. The greater the reward rate, the higher.
- Welcome Offers: Some cards have attractive welcome bonuses, like additional reward points or cashback, if you sign up and make a certain level of spending within a set time frame.
- Extra Perks: Some credit cards offer special features apart from rewards or cashback. These can include free or discounted movie tickets every month, dining discounts, fuel surcharge waivers or, for travellers, airport lounge access credit card features.
How to Pick the Right Credit Card for Your Needs
Here’s how to match your lifestyle with the right card:
- Frequent Flyers: Opt for an air miles and airport lounge privileges credit card, or a travel credit card.
- Online Shoppers: Opt for a rewards or cashback credit card with rewards on online shopping websites such as Amazon or Flipkart.
- New to Credit: A credit card against an FD is a risk-free choice to start your credit journey.
- Regular Spenders: A fuel, grocery, or utility bills rewards card may be the ideal credit card for your daily usage.
Conclusion
Choosing the best credit card doesn’t have to be confusing. Think about your lifestyle, compare your options, and check for important features like fees, rewards, and extra benefits. Whether you’re indulging in airport luxury with an airport lounge access credit card or getting your credit journey going with a credit card against FD, the ideal card can make you a better money manager. With the ideal choice, you’re not merely spending — you’re also earning and creating your financial future.
