The best way to pick a credit card is to analyse your needs. While there is a wide variety of options available, apply for a credit card that suits your lifestyle needs. Before selecting the right card, consider a few necessary factors.
Depending on your spending needs or financial goals, you can compare various credit cards and choose the right one.
Check These Factors Before Applying for a Credit Card
Here are a few important parameters to consider to zero in on a card that best matches your needs.
Spending Pattern
Choose a credit card that provides perks according to your spending patterns like purchasing groceries, dining out frequently, etc. If you’re an avid shopper, you get to enjoy discounts and reward points on every purchase.
Likewise, if you travel a lot, a credit card offering great travel deals is optimal for you. However, you need to ask yourself a few questions, such as:
- What do you spend on the most?
- How can you benefit from the reward system?
- Will you get shopping benefits like cashback and offers?
- Can you get a fuel surcharge waiver on your fuel purchases?
Asking these questions helps you choose the right card according to your needs. However, you need to ensure that you meet the eligibility criteria set by the credit card provider to avoid rejections.
Travelling Benefits
As mentioned, if you are a frequent traveller, choosing a credit card based on these points helps you maximise your travel benefits, ensuring you enjoy a stress-free experience. Some of the common perks you get to opt for include:
- Specific travel insurance coverage
- Discounts on hotel bookings
- Lounge allowance
- Discount on flight fares
- Discount on rental cars
Eligibility Criteria
Issuers set certain parameters that you need to meet in order to get a card of your choice. For instance, you want a card to manage your regular purchases, such as paying for groceries or utility bills. However, the issuer requires you to meet a certain income criterion, and if you don’t fall in that category, getting approval may be difficult.
So, it’s always ideal to check the eligibility criteria on the issuer’s portal before you proceed to apply for the card.
CIBIL score
A credit or CIBIL score is a 3-digit numerical summary of your creditworthiness, which ranges between 300 and 900. A score closer to 900 is excellent, while a score less than 500 may result in the issuer rejecting your card.
Ideally, issuers require you to have a score of 750 or above. Some card providers may approve your application even if the score exceeds 700. A good score assures the issuer that you won’t default on bill payments.
That said, if you are looking for a credit card to boost your credit history, ensure that you pay your bills on time and in full. It will improve your CIBIL score while making you eligible to apply for loans in the future.
Additional Parameters You Should Take into Account Before Picking One
You should choose a credit card depending on your financial goals. Are you looking for a credit card with lower interest rates or to enjoy perks on travelling, shopping or dining? By taking your financial needs into account and considering the benefits below, you can choose a credit card that is flexible for you.
Rewards, Cashback and Discounts
If you plan on using a credit card for everyday purchases, a reward-based credit card is a good choice. You can collect rewards on every purchase that can be redeemed later to enjoy other benefits.
Other than that, there are plenty of cards that give higher cashback rates on specific categories like groceries or fuel. If you dine out frequently, opt for a credit card having good discounts at select restaurants.
Renewal Fee
Looking at the reward and cashback offers can make a credit card offer tempting. However, they can have higher annual maintenance charges. These charges increase over time. For a better money-saving option, look for cards bearing lower renewal costs or no annual charges.
Sign-up Incentives
Some credit cards provide a sign-up bonus to new cardholders. However, it shouldn’t be the deciding factor, but it does add to the perks.
Interest Rate
When getting a credit card, interest rates play a major role if you are planning to carry over your balance from one month to another. In that case, a higher rate can increase your monthly bill payments, which can overburden your finances. So, it is economically viable to choose a credit card with low interest rates.
Credit Limits
The credit limit varies from card to card. Getting a credit card depending on your spending pattern is a wise choice rather than aiming for a card with a higher limit. In case you pay your bills on time and demonstrate discipline in repayment, you can request the issuer to increase your card limit.
This is what you can do if you’re wondering how to increase credit card limit. All it requires is financial commitment and you can get a limit matching your lifestyle needs.
Redemption Option
While considering the rewards and cashback, also look for redemption options. If you have to pay additional charges while redeeming your rewards, opting for such a card may not be ideal.
One such card with zero rewards redemption fees that you can consider opting for is the One Credit Card. This metal card is a lifetime-free card that offers several attractive features, such as up to 5X rewards on the top two spending categories, along with shopping and dining perks.
You can get easy access to travel offers by getting a detailed expense planner based on your preferred mode of travel – economy, luxury, or backpacking. Get access to a forex calculator to check forex charges before you make an international transaction through the One Credit Card App. Apply now in just a few clicks and enjoy a range of perks.
