While choosing a credit card for yourself, you can be overwhelmed by the number of options available in the market. There are credit cards that offer various features and benefits, depending on the usage of the card. For instance, you will find varieties of credit cards offering rewards, bonuses, no-interest periods, and the chance to build credit.
There is not a single card that you can term as the best credit card in India, as each credit card caters to specific requirements. We have prepared some tips to narrow down your options when choosing a credit card for yourself.
Check Your Credit Score
Your credit score plays a crucial role in identifying what kind of credit card you will qualify for. If you want a credit card that offers rewards, bonuses, and a promotional interests rate, you will need to maintain a credit score of 700 or above. You can check your credit score online from the Credit Bureau’s website.
After knowing the credit score range that you fall in, you can fine-tune your credit card search. Look for credit cards that require a credit score equal to or less than yours. If your record is not good, do not lose hope. Lenders consider other factors than your credit score to approve your credit cards application, such as income and monthly housing payments.
Define A Credit Card That Best Suits you
When looking for the best credit card in India, you will need to assess your needs and choose a card that serves them. There are three main categories of credit cards – rewards, 0% APR, and building credit. If you have a good credit score and have no debt, you may want to apply for a rewards credit card that significantly reduces the overall cost of purchases. You can redeem your reward points or miles to pay for your upcoming travel. You can get cashback, reward points, or miles for spending on gas, groceries, travels, and dining, which can be redeemed for gift vouchers, airfare, hotels, etc.
Another option is 0% APR card that enables you to get rid of your debt or make new purchases at zero interest. As the name suggests, you do not have to incur interest charges on purchases and balance transfers. Some banks offer 0% APR for up to 19 months on balance transfers and purchases. The benefit of opting for a 0% APR credit card is that you can save significantly on the interest rate for a minimum of one year. If you have to make a large purchase, it would be wise to put it on a 0% APR credit card and avail of no interest charges while you repay your debt.
Also, if you have a credit score below 600, you should opt for a credit card that helps in building credit rather than getting one that offers rewards. Having a healthy credit score enables you to get the best interest rates and increases approval odds for credit cards. Secured credit cards are the best choice for people with bad credit scores.
Consider Interests Rates And Other Penalties
The interest rate on your credit card appears as the Annual Percentage Rate. It can be either a fixed rate or variable rate tied to the prime rate. With a fixed-rate credit card, the rate of interest remains constant throughout the months. A variable-rate card is known for fluctuating interest rates. It is worth noting that you will have to pay interest charges for carrying a balance from month to month. You do not have to incur interest if you pay your credit card bills on time and in full.
Interest rate is not the only charge you will have to watch out for. You will need to consider other common charges, such as transaction fees, balance transfer fees, and cash advance charges. You will also have to pay penalty charges for paying your credit card bill late or spending more than the assigned credit limit.
So, while identifying the best credit card in India, choose a card with a reasonable interest rate and other fees. For example, if you are opting for a balance transfer, make sure there is no balance transfer fee, and you can get an interest-free period for a minimum of one year.
Using credit cards is the best way to manage your finances without putting any burden on your pocket. However, the catch is that you need to use your credit card wisely. Always ensure to pay your credit card bill on time and in full to avoid interest charges and other penalties.