How to choose the right credit card for yourself?

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How to choose the right credit card for yourself?
As with the other credit instruments, credit card should also be chosen after paying heed to few of the considerations. Some such points that require your attention before shortlisting the credit card for yourself are listed hereforth

1. Annual fees: With the gamut of credit card options available today, annual fee can be one of he criterias for you to decide on the credit card. Though, a higher annual fee generally confers more perks associated with the credit card. Nonetheless, depending on the scope of your utility, you should bet on the credit card. Also, a cost benefit analysis for evaluating the fair worth of the credit card can be useful.

2. Interest rate: It is one of the prime consideration that a potential credit card customer cannot overlook. As, it shall decide the cost of your borrowed money in case you keep an outstanding balance due on your card. Though, the credit card charges offered by different banks in India falls in the same range, few of the banks including SBI via its SBI Advantage Pus card offers credit card financing facility @ 2.25% p.m. or 27% annually . Additionally, to avail of the lower credit cost, borrower is required to maintain an FD with the bank and the final limit will be of a maximum of 85% of the value of the FD.

3. Security Features: With an increase in credit and debit card fraud, it becomes all the more necessary to ensure that the issued credit card bears in few of the newly introduced security features. Such as the card is PIN-enabled, EMV-chip based. Earlier to enhance security measures, Rbi advised banks to issue EMV-chip based and PIN enabled cards to card holders who had even once made a transaction in the foreign country. To provide an extra security layer against fraudulent usage, banks have already put in place the process wherein a one time password is sent on the customers's registerd mobile number which needs to be entered for completing the transaction.

4. Reward points and cash back: Your scope of utility should also decide on the credit card, as a travel rewards card that fetches you reward points in case you reach the threshold travel spending will be useless for you if you rarely travel. Know why reward points go unredeemed?

5. Benefits: Benefits that accrue as a result of you holding a particular credit card should also be factored in, in your choice of a credit card Some credit card allow you rebate on your fuel purchase while others provide you with substantial discounts when using the credit card at the outlets with which the credit card issuing company has a tie-up

6. Sign-up bonus: Signup bonus in the form as reward points, cash back offers is offered with many of the credit cards.

7. Customer service: Efficient customer service by the credit card issuing bank shall go a long way in you being a loyal customer of the bank.

Story first published: Thursday, April 3, 2014, 12:15 [IST]
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