Joining The World of Credit Cards
However, you are not sure about where to start from and what to do. Well, don’t worry; you are not alone;
there are a lot of people in the same situation...
You don’t have a credit card yet but you have been thinking of starting your journey into the
amazing world of credit cards.
You already know where you can get a credit card from. There are advertisements all over the place and reaching
the credit card suppliers is easier than reaching anyone in the world. Just look around. However, the point of
dilemma is how to choose a credit card which will suit your needs.
Here is a list of things that should help you out:
1. Evaluate your needs
There is nothing like a ‘best credit card’, simply because different people have different needs. So the first
thing to do would be to evaluate your needs.
Do you need the credit card just out of fad or do you need it because it will help you do online shopping or do
you need it because of the discounts and other benefits it will provide you or do you just need them because you
frequently run out of cash before your salary day.
2. Credit limit
Various credit cards offer different credit limits (i.e. the maximum amount you can spend every month using that
particular credit card). Based on what your requirements are, this is one of the factors to consider when choosing
a credit card.
3. Repayments & APR
If you plan to pay your credit card bill in full at all times i.e. your purpose of getting a credit card is
‘convenience’ and not ‘need for money’, you needn’t worry about the APR. However, if that is not the case then APR
is going to be one of the biggest factors in deciding on a credit card.
APR will not only lead you into paying interest on the outstanding balance on your credit card but will also
keep adding to the principal amount that you owe to the credit card company; hence creating a vicious cycle.
You might also consider the late payment fees when deciding on a credit card. Also, it’s important to note that
the world of credit cards is not free money. So, be fully aware that whatever you spend
on your credit card is borrowed money which you need to return to the credit card supplier.
4. Special credit cards
There are a variety of credit cards available in the market and some of these are targeted at specific people
(or their needs). The two best examples of this are students and small business credit cards.
As suggested by their names, the former is meant for students and the latter for small businesses.
The terms and conditions on such cards are specially tailored to suit the needs of these people and are
different from the normal (personal) credit card. Check if there is a special category for your needs.
5. Co-branded credit cards
A lot of retail chains, airlines, hotels etc also offer co-branded credit cards that have additional benefits
associated with the business that is offering them e.g. an airline might be offering additional miles (reward
points) or a discounted rate if you paid for tickets using their co-branded credit card.
Similarly, retail chains might be offering discounts too if you used the credit card supplied by them for
shopping at their store. So if you travel frequently or are an impulsive shopper, one of these credit cards might
be more suitable for you than the others.
6. Other benefits:
You might like to check other benefits offered by the credit card companies/suppliers. These include things like
membership rewards, free travel insurance, baggage protection etc. Sometimes these hold a good value.
So, it’s not difficult to choose the credit card that would be ideal for you. Just have your needs charted out
and go hunting from the world of credit cards.