Plastic is now emerging as the widely accepted currency for day-to-day transactions. We have a range of more than 50 cards from different banks on offer in the market. There are credit cards out there designed for every kind of person. In such a scenario owning a credit card is a must, but before you take a decision there are many criteria to be considered.
The three most important considerations that you must look at are the lifestyle you lead, the kind of account that would benefit your financial needs and your own spending pattern.
First of all, you have to find a card that benefits your lifestyle. There are exclusive cards for doctors, women, frequent travelers, cards providing entertainment get-aways etc. For example, there are cards that give you reward points for flight travels, hotel stays, etc. and also help you book your tickets through the cards. Many cards can provide you with considerable discounts on these kinds of services through your affiliation with their business. If you are a person on the move or your job requires you to travel frequently then these services can be great perks, offering convenience and saving you a considerable amount of money each year. Cards to consider in this category are mostly premium cards such as Citibank Jet Airways Card, HSBC Gold, American Express (Amex) Gold and ANZ Grindlays Gold card. Another feature offered by almost all cards is the insurance cover. If you are a frequent traveler, then opt for a card which provides insurance cover for your baggage.
Another related aspect to consider is the acceptability of the card. The more widespread the distribution and branch network of the card, the better for you.
Secondly, you have to take a look at your financial needs. There are cards that cater to every financial need possible. Some needs include high lines of credit, low balance transfer rates, low annual payment rates, no annual fees, long credit periods, etc. Other classifications include gold, silver, and platinum accounts, signifying different perks for different needs.
The third and perhaps the most important criteria is to understand your spending behavior. If you are a person who thinks twice before opting for a credit payment, then interest rates and holding period offered by the card will not matter to you. The important features to be considered in such cases would be prompt service, customer response, acceptability and branch network (reach) of the card. Also look for cards which have tie-ups with shopping establishments and give discounts at merchant establishments.
On the other hand, if you are someone who loves to revolve credit, then take care to clear your bills within a short time. Also it would make sense to revolve credit for big purchases, as you will get time of about two to three months to pay up. The credit period and the interest rates charged by the card would be of utmost importance in such cases. Look for cards that offer low interest rates and allow you to pay through a flexible payment plan.
Yes, credit cards do offer convenience and flexibility, but at the same time they must be chosen and used with care, to reap their benefits. The onus is on the consumer to pick the right card. Spend time and make your choice, else you might end up paying a huge cost.