How Do You Pick the Best Credit Card?

The use of credit cards as a means of payment for goods and services has increased in popularity and convenience. If you are using your credit card responsibly and pay off the balance in full before the due date, it can help you to boost your credit score. Furthermore, you can benefit from excellent savings, cash-back, and frequently available offers. Credit cards can also be used to buy expensive items or white goods on EMIs (equated monthly instalments). Credit cards can also be used when one needs money right away in an emergency. Credit cards are practical for hassle-free online and offline transactions as they provide an interest-free period of up to 45 days.
To meet the different demands of customers, a wide variety of credit cards are offered. The ideal credit card for your spending habits can help you save more on everyday purchases by providing rewards points, cash-back, discounts, and other benefits.

It can be challenging for people who want to get a credit card to choose the ideal one. Unfortunately, there isn’t a single card that can satisfy everyone’s requirements. Your individual spending habits and reward preferences will determine the best method for choosing the right card for you. In order to make a better judgement, it is advised that you step back and consider why you chose a particular card.

Here, we offer advice on how to select the best credit card. Credit cards are a two-edged blade that may both create and damage your credit history. As a result, it is critical that you understand about all aspects of a credit card before applying for one.

You should carefully consider a number of variables when selecting a credit card, including offers, discounts, cash-back, charges, fees, payment alternatives, services, terms & conditions, and the credit limit.
Regardless of the incentives you receive, many cards include reward programmes that have an expiration date. Use the prizes before they expire, whether you decide to earn them and redeem them all at once or frequently. People who use credit cards frequently accrue rewards but do not use them before they expire.

Some credit cards provide incentive programmes that accept credit card points. This is an additional reward strategy. For instance, the Standard Chartered Super Value Titanium Credit Card offers the Good Life Program, where reward points can be exchanged for savings on lodging and travel-related items.

What Kind of Lifestyle Do You Lead?

Credit cards are a simple form of payment, but they are also a fashion statement. To get the most out of a credit card, you must choose one that is appropriate for your needs, spending habits, and lifestyle. Numerous banks provide credit cards that are designed to meet the requirements of various lifestyles. Select a credit card that best fits your way of life and offers you the greatest benefits.

A co-branded credit card from an online travel agency or airline, for instance, would be a good choice if you fly frequently. A card like this one offers advantages like priority boarding, free airport lounge access, and more to make your trip easier and more enjoyable. For instance, HDFC Diners Club Black provides six complimentary rounds of golf every three months, unlimited access to lounges, and bonuses of up to Rs15,000. If you have an annual income of at least Rs. 21 lakh and you are a high spender, take this into consideration.

A no-fee, international credit card called Vijaya Rupay gives 12 free visits to lounges and 5% cashback on meals and utilities. If you don’t like to spend a lot of money, try this.

Eight domestic trips and Rs. 11,250 in bonuses are included with the Air India SBI Signature card. If you travel with Air India, think about this.
Four domestic lounge visits per quarter are included with the ICICI Sapphiro Amex card. Dreamfolks DragonPass is free with a US$99 yearly membership subscription. If you are interested in hotel benefits but are not a heavy spender, think about getting this card.

Additionally, you have the potential to accrue miles that may be exchanged for free flights or free stays at luxury hotels. Buy four hotel nights and get one free with Citi Prestige’s Priority Pass membership. If you are a large spender and have Citigold Private status, take this into consideration.

The Pride Signature Credit Card from Axis Bank is the finest credit card for travel rewards with an easily attainable annual fee waiver. The first year is free, but if your annual spending is less than Rs40,000 after that you will theoretically be charged Rs500. The Card’s value is primarily derived from general purchases, which offer fantastic 1.6% cash-back on all purchases other than petrol.

If you enjoy entertaining, going out to eat, or socialising frequently, consider choosing a card that provides a superior dining experience, larger points, and discounts at restaurants. Good Food Trail offerings from HDFC Cards are fantastic. Dining promotions are also available on HSBC cards. ICICI cards may offer restaurant promotions.

15% off eating at more than 2,500 restaurants is available with the ICICI Bank Platinum Chip card. With the exception of fuel, you receive two PAYBACK points for every Rs. 100 spent on retail purchases and one PAYBACK point for every Rs. 100 spent on utilities and insurance. At HPCL gas stations, there is also a 1% fuel surcharge waiver on fuel transactions up to Rs. 4,000.

You might find a co-branded Shopper’s Stop credit card beneficial if you only shop at Shopper’s Stop. (Citi First Citizen card).
A cash-back or rewards card can be the ideal option for you if your lifestyle is fairly simple. For people looking for a cash-back card with higher utility rates, the Standard Chartered Super Value Titanium Credit Card is a fantastic choice. It provides 5% cash back on phone, petrol, and utility bills (subject to Rs750 minimum transaction, with a maximum cash-back of Rs100 per month).

People who want to get cash back on their supermarket and internet purchases might consider the Kotak Mahindra Essentia Platinum Card. A 10% rewards rate (10 Saving Points for every Rs100 spent; 1 point equals 1 Re1) would be offered to prospective cardholders. The minimum transaction amount to qualify for this high rate is Rs. 1,500, and the total number of points earned each month from grocery and retail purchases combined is 500 points.

An entertainment credit card would be more suitable for you than one in any other category if you are someone who spends more money on leisure activities like going to the cinema and clubs. For people who want to use their credit card for eating and entertainment expenses, the Kotak Delight Platinum Card is a terrific choice. The Card provides the finest 10% cash-back on dining and leisure categories available in the market (maximum Rs4,000 per transaction, maximum Rs600 cash-back per month). The redemption mechanism, however, necessitates cardholders to spend Rs10,000 per month on categories other than dining and entertainment, so you must be a large spender to take advantage of these incentives (no other category earns rewards for this card). On the other hand, if you spend Rs. 1,25,000 each month, you’ll receive a Rs. 750 anniversary bonus (or four free PVR tickets).

The HDFC Regalia credit card is a wonderful choice if you’re seeking for one that gives benefits in all areas. Excellent dining and travel deals, a solid rewards programme, and a thorough protection plan are all available.

Rewards on credit cards
Miles, points, and cash-back are the three primary reward types. Cards accumulate rewards that can be used as cash-back, miles, or reward points depending on the category. One of these three reward categories may be the greatest fit for you, depending on your hobbies or spending habits.

What if, however, you travel relatively infrequently yet frequently make online or offline purchases? In this case, if you use a credit card with air miles that only offers a small percentage of miles for retail purchases and extra points for booking flights, your purchases won’t be effectively rewarded. Since your points will start to expire after two years, it is more likely that you won’t be able to accrue enough air miles to qualify for a free flight. As a result, you can never really maximise your spending or make your credit card work for you.

In this decision-making, reward points are the most important consideration. Utilizing your credit card is made more appealing by reward points. The rewards rate for the ICICI Bank Sapphiro American Express Credit Card is 1.5 percent (6 points per 100 rupees; 1 reward point = 0.25 rupees) for purchases made abroad, 0.7 percent (3 points per 100 rupees; 1 reward point = 0.25 rupees) for purchases made generally, and 0.25 percent (1 point per 100 rupees; 1 reward point = 0.25 rupees) for purchases made on utility bills and insurance.

Typically, each reward point is worth between 25 and 50 cents. Look up the market value of the items in the reward catalogue and the number of points needed to redeem it on the bank’s portal. One reward point is worth 41 pence, for instance, if a Wonderchef waffle machine costs Rs 2,500 and you need 6,000 reward points to redeem it.

In general, prizes are not as easily obtained as you might believe. Cash-back rewards are frequently given very swiftly and used (thus, more useful to people looking for quick redemption on their rewards). However, due to lengthy processing times, redeemed miles can take up to a month to arrive, which makes them less desirable for individuals who want incentives more quickly. However, mile awards are still desirable.

Category & Offers for Credit Cards

Customers that spend more money on items like clothing, jewellery, groceries, technology, and other items are the target market for shopping credit cards. Additionally, certain e-commerce portals accept special rewards from credit cards made specifically for online buying. Housewives who must manage all of their groceries and other retail purchasing are the ideal candidates for this type of credit card.

Travel credit card: This card is best for frequent travellers, those who must reserve hotels and flights, and those who require cash for purchases made abroad. Cardholders of travel credit cards are able to do all of this and pay later. The majority of these would also provide a restricted amount of free lounge passes at airports. The reward points are an additional advantage.

Lifestyle Credit Card: These are high-end credit cards that are best suited for the affluent populace that enjoys fine meals, makes expensive purchases, etc. These credit cards provide more discounts, more rewards points, and complimentary concierge services. In comparison to other credit cards, the annual cost for these cards is greater because they provide additional benefits. (Citi Premier Miles Credit Card, Everyday Spend Gold Credit Card from American Express).

Reward Points Credit Card: One of the alluring advantages that credit cards offer is reward points, and an increasing number of people use credit cards exclusively for this purpose. Numerous credit card issuers have launched credit cards that enable you to accrue extra reward points that can be exchanged for a variety of gift items. (HSBC Visa Platinum Credit Card, HDFC Bank Regalia Credit Card, Standard Chartered Platinum Rewards Credit Card)

Cash-back Credit Cards: Cash-back cards let you save money on all of your purchases. They are comparable to credit cards that earn reward points. On a variety of purchases, including dining, purchasing tickets, booking hotels, etc., one receives a set amount of cash back. The cash-back points can also be used to lower the monthly payment for a credit card. (IndusInd Iconia American Express Card, HSBC Cash-back Credit Card, Standard Chartered Ultimate Card).

Fuel Credit Card: If you own a car, you must pay a sizable sum each month for fuel costs. In order to help you save more on fuel prices, certain credit card firms have developed fuel credit cards. On such a card, one can receive a 3% fuel surcharge waiver. (BPCL SBI card, ICICI Bank HPCL card, Indian Oil HDFC Bank Credit Card).

Women’s Credit Cards: Recognizing the need of giving women financial independence, certain credit card firms have developed special credit cards just for women. This credit card can be used by women who enjoy shopping to get deals and discounts. (RBL SHOPRITE Credit Card, Citibank Rewards Credit Card, ICICI Bank Coral Credit Card, HDFC Bank Solitaire Credit Card).

Business credit cards: Companies spend a lot of money running their companies. All business expenses, including those for inventory, machinery, and other items, can be reduced and reward points can be earned by using a business credit card. The company credit card aids in accounting for all expenditures. (Citibank Corporate Credit Card, HDFC Bank Moneyback Card, ICICI Corporate Credit Card, Axis Bank Business Credit Card, SBI Platinum Corporate Credit Card)

Secured Credit Card: To be authorised for a credit card, applicants must have a stable source of income and a high credit score. However, those who are turned down can choose a secured credit card if they have a fixed deposit (FD). On this kind of credit card, the credit limit is typically offered up to 80% of the FD amount. (Credit cards from BOB Financial Prime, Axis Bank Insta Easy, and Kotak Silk Inspire).

Student credit cards: These were created especially for post-graduate students. The income of the father or legal guardian determines the requirements for eligibility for this card. These cards can be used by students to buy laptops, electronics, stationery, etc (SBI Student Plus Advantage Credit Card, ICICI Bank student travel card, HDFC Bank ForexPlus card).

You must carefully study all the terms & conditions associated with each deal after viewing all of the ones that are offered. When selecting a credit card, make sure each offer is still active.

Joining Bonuses: The majority of credit cards in the premium and travel categories offer enticing welcome benefits or joining bonuses in the form of free gifts and extra bonus reward points. Before choosing a specific alternative, you can evaluate the joining bonuses of similar cards.

Finance Charge: Credit card issuers impose finance charges on cash withdrawals and on the non-payment or partial payment of an unpaid amount by the due date. This fee is assessed from the transaction date until the full amount owed has been repaid. Depending on the type of card you have, the annual finance charge can range from 30% to 42%. Even though you should always settle any balances prior to the due date, you should still take these fees into account when applying for a credit card.

Credit Score: Your credit score, monthly income, and employment information are the main factors determining whether your credit card application is approved. Different weights are assigned to these criteria by each bank. People who have credit scores of 750 or higher often have better odds of having their applications for credit cards approved quickly.

Annual Fee and Additional Fees

You should look at the annual and renewal costs of the credit card if you’re choosing one for the first time in India. Check the requirements for annual and renewal fee waivers. Waiving off requirements typically depends on your spending habits. Therefore, it would be wise for you to analyse your expenses before selecting a credit card.

You must carefully review the other fees as well.
● Late Payment Fees
● Cash Advance Fees
● Rate of Interest Charged on the Balance Amount
● GST
● Foreign Currency Mark-up Fees
● Cash Withdrawal Charges
● Mobile Alert Charges
● Balance Enquiry Charges
● Duplicate Statement Charges

Credit Limit
Every credit card has a different credit limit, and each person’s credit limit is depending on their income. Therefore, you should speak with a bank representative and inquire about the highest credit limit you are eligible for based on your income before applying for your first credit card.
Avoid using credit cards with co-branded logos because they tie all of their advantages to the linked brand. (The HSBC MakeMyTrip credit card). Only choose these cards if you are extremely engaged with the partnered brand.
As a result, you must first determine your precise credit card needs before reviewing the card’s details. Check the fees, charges, payment methods, and all of the card’s offerings in the specifications and base your decision on all of these elements. Ideally, you should have at least two credit cards—a Visa and a MasterCard—each with a different billing cycle.