In developed economies, credit cards are a standard route of transferring financial payments. Presently, the usage of credit cards in India and other developing economies is getting normalized.
The market is overflowing with versatile credit card options from various lenders. It leaves customers in a dilemma while looking for the one that is suitable for them. For example, credit cards provide free air miles based on the amount you spend on your card. Alternatively, you may use a fuel card to skip the surcharge while purchasing fuel. However, the amount of security provided differs from card to card. In addition, several credit card companies give cashback as rewards.
Furthermore, several cards provide a combination of some of these characteristics. Unfortunately, people often fail at calculatedly extracting credit card benefits to gain rewards. Multiple options make it difficult for people to select a high-reward credit card that suits their needs.
Given below are a few tips to select a suitable high rewards credit card smartly:
Select a credit card that aligns with your lifestyle
Given below are a few guidelines to opt for a credit card that aligns with your lifestyle:
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Check if you can manage the credit card interest
While looking for credit cards in India, pay attention to the interest rate. It is crucial to figure out if you can afford the rate of interest or not. The AER or the annual equivalent rate reveals the interest that the use of a credit card carries.
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Look out for the debt limit before getting a credit card
Debt limit means the maximum amount of money you can spend presently and return in the future. Factually, the money spent on a credit card is a loan that has to be repaid mandatorily. Therefore, you must ensure that you can handle the debt limit in the future. The earlier the debt is paid, the lesser the cost that a customer will have to endure.
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Check if the rewards being offered align with your areas of interest
To extract credit card benefits to the highest level, stay alert about the rewards being offered. For instance, shopaholics should choose a credit card that gives discounts rather than one that provides flight tickets.
Examine your spending and saving patterns
Besides checking the specific rewards being offered, check your patterns of saving without spending. If you get shopaholic urges, then a high debt limit credit card might not be your cup of tea. The ability to save up before the due date of debt payment is needed for high debt credit cards. It is important to note that a pattern is a series of events and not a one-time action. If you manage to save once in a blue moon, then it is not a pattern.
Avoid overlooking the rate of interest
Avoid the mistake of overlooking the interest rate applicable to the balance while looking for credit cards in India. Some credit cards undeniably offer unbelievable privileges and rewards. However, high rates of interest on the balance can nullify the benefits offered. Therefore, ensure reminding yourself to assess if your budget and savings can afford the interest rate.
Check if the annual and renewal charges can burn a hole in your pocket
Some credit cards provide well-suited advantages and perks. However, the renewal fees, annual fees, and other charges might be sky-high and nullify the benefits. Therefore, being well-informed can aid in thinking like a wise customer.
Compare the features provided by various credit card companies and research
Compare the credit card benefits of various credit cards to understand which is best for you. Examine the card's rewards about your individual needs and security features in the event of fraud or theft. Additionally, analyze if you can meet the fees charged, such as the annual fees or the late fees. You can examine the various types of credit cards to select the right one that fits your requirements. Some of the credit cards according to the needs they prioritize are mentioned below:
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Secured credit card
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Reward credit card
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Shopping credit card
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Fuel credit card
One must keep in mind that credit cards in India are as diverse as its citizens. Hence, it is advisable to follow the tips mentioned above before selecting a high-reward credit card.
