So, you have been getting these emails from your banks, subject - “You are eligible for our credit card”. After prolonged brainstorming and numerous consulting sessions you have decide to apply for your first credit card. However, have you done your research well enough? Here are 5 things you need to do before selecting the right credit card.

Motive of your application

A simple question you need to ask yourself before you dive into the pool of credit cards is why you need one? There are various categories bank divide their credit cards into. From travel, entertainment to leisure and shopping. Your lifestyle will describe the card you choose. Example- if you are a frequent traveller choosing a travel credit card would be best for you. Banks offer specific perks pertaining to specific categories. To get the best of your card select the category you'll be maneuvering it for the most.

2. Charges
Routine charges for credit cards open in the hundreds and go up to thousands. It is your will to pay these charges that depicts the card you choose. The charges come in the form of late payments, annual fees, finance charges and cash withdrawal limit. Compare various cards in accordance to these charges and choose the one that is overall beneficial for you.

3. Credit Card Limit
If you are amongst the ones who have extravagant travel, shopping and entertainment expense you might what to choose a card with higher credit limit. However, if your usage is minimalistic going for a low limit card could be the best option. In a lot of cases there are certain charges that are waved off if you use your card wisely. Be smart and pick a card that suits your lifestyle.

4. Rewards and Cash Backs
Rewards and cash backs are an integral part of a lot of credit cards. If you choose to get the most of your card always survey the actual values of the reward points before jumping into conclusions. Factor the time and value ratio of the cards and determine the long term benefits of them. The rewards or cash backs are directly proportional to your usage. More you use your card fruitful are the rewards. Personally, opt for cash back cards that allows you to use them any and everywhere.

5. Interest Rates
The word interest rates have always horrified us. Be it EMI's or loans, lowest interest rates are our top priorities. The same is with credit cards, they have annual percentage rates or APR. Be informed about how much your interest will be? Or if its fixed or variable, monthly or annual.

Conclusion
Bottom line, an extensive research into all the factors are crucial. Consider your usage, lifestyle, expense pattern and more to zero in on a card. Choose a bank that will deliver long term benefits. Consider reviewing your credit score for deals on your credit card. A good credit score always welcomes better rewards and give outs.

By Ruchi Mahajan

© 2019 Copyright Ruchi Mahajan - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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