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How to choose a credit card that fits in your lifestyle?

Since the introduction of the Digital India campaign on a nation-wide level, credit card usage has been on the rise. According to a recent data by the RBI, the total number of credit cards in circulation in July 2020 was around 57 crore, suggesting that Indians are increasingly getting used to the idea of purchasing on credit and paying for them at a later date. 

Accordingly, financial institutions and NBFCs are also coming up with various credit card types to fulfil the lifestyle requirements of their customers. 

However, as the payment tool is a credit instrument, one must be careful while choosing a credit card since its usage creates an impact on one’s CIBIL score. Individuals should also opt for a credit card that fits their lifestyle needs since it will enable them to meet their spending goals and aid in effective fund management.

Here are some steps that you can follow to choose the right credit card for yourself that will complement their lifestyle needs – 

  • Analyse your spending requirements 

Before applying for a credit card, you must determine your purpose for availing the card and how you are planning to use the card. For instance, whether you will use the card for small day-to-day purchases or big-ticket items must be determined. 

In that case, individuals can also consider different credit card types from financial institutions that allow them to convert their outstanding amount to affordable EMIs for a reduced repayment strain.

However, if you are only applying for a credit card for emergency use, then opt for one with nominal maintenance fees.

Additionally, you should also consider your repayment capability, such as whether you will be able to pay off the due amount in full every month or if such repayment creates unnecessary financial strain. In that case, you should opt for a card with low rates of interest.

  • Reward program 

One of the most important things that applicants should look for while choosing a credit card is reward programs and other perks available on it. If you are looking for a card for a specific spending need, then you should look for instruments that offer rewards points for the same. For instance, accelerated reward points, cashbacks, and discounts are offered with select credit card types when making purchases through partner lifestyle outlets.

  • Compare credit card companies

After determining your spending requirements, you should conduct comprehensive research on different financial institutions, such as NBFCs, offering customised cards for lifestyle needs. While comparing card issuers, one must consider a few specific aspects – 

  1. Interest rates – Credit card interest is only charged if the user makes a late payment or pays only the minimum amount due. Nevertheless, to mitigate the additional financial burden in case of late payment, one must check out the interest rates on cards being offered by financial institutions. Apart from that, you should also know how to reduce your credit card interest and save money to maximise its benefits. 
  2. Fees – Other than interest rates, credit card companies levy several additional fees on users. These can include annual maintenance fees, joining fees, foreign transaction fees, late payment fees, if any, goods and services tax, etc.
  • Consider the available features and benefits 

Prospective credit card applicants must also consider going through the features and services offered by the card issuer. Some of the features that one must look out for are as follows – 

  • ATM cash withdrawal – 

One must look out for a suitable credit card type that offers users to withdraw cash from an ATM for an interest-free period, wherein such period can extend up to 50 days. One only has to pay a nominal processing fee during withdrawal. However, such features are only offered on specific cards such as Bajaj Finserv RBL Bank SuperCard. 

The card also comes with other features and benefits such as pre-approved offers which simplify the process of availing a credit card and make it less time-consuming. Such offers are also available on products like business loans, personal loans, etc. Individuals can check their pre-approved offer by entering their name and contact information.

  • Emergency loan offer – 

Cardholders should also consider credit cards in India which carry features such as easy providence of a lump sum amount against the unutilised credit limit. Such features will enable them to opt for a personal loan in case of an emergency without paying any interest for up to the first 90 days. 

Lastly, while looking for a suitable credit card in India, individuals should also go through the eligibility criteria set by card issuers to see if they satisfy all the parameters. Such prudence is crucial since their application may be rejected if they don’t meet the qualifying requirements.

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