A number of times, we at Paisabazaar, have come across questions like ‘which credit card is best in India’ or ‘which bank offers the best credit card’. Honestly, one credit card will never be better than all other cards across all categories combined and hence we can never specify the ‘best credit card’. In fact, the usefulness of a credit card will depend on your needs and how you plan to use the card.
So, here we have listed the 5 basic steps to choosing the right credit card for you.
1. Identify your needs
Credit cards can be classified into multiple categories based on usage such as travel, shopping, dining, etc. However, the core need of a user will be one of these:
- To build or improve credit score
- To shop for big-ticket items and pay back in EMIs
- To avail offers across multiple categories and save money
The best credit card for you would be one that fulfills your core need. For example, if you are getting a credit card for the first time, you would like to build credit and a card with very high annual fee would not be a good choice. Let us find out how you can filter out the credit cards based on your core need.
To build or improve credit score
If you do not have a credit profile yet, you can start with it by getting a credit card. A secured credit card or a zero annual fee credit card would suffice. An important point to note here is that all banks in India do not offer credit cards to people who are new to credit so you must start your search with the bank you already have a relationship with. For instance, those who have just started a job would be able to get a credit card from a bank they have their salary account with.
Such cards could also help you in recovering from a damaged credit score.
Read More: How Credit Cards Affect Your Credit Score
To avail offers across multiple categories and save money
This is a more usage-specific benefit as you can enjoy most of the benefits when you know where you will use your credit card the most. Such offers will help you save a lot of money. For example, a credit card with co-branded benefits would be great if you are a loyal customer of the said brand. On the other hand, a card with complimentary lounge access would help you save money on your next trip.
To shop for big-ticket items and pay back in EMIs
This is a benefit you can avail on almost all credit cards. Hence, this need can also be combined with usage-specific requirements. Say, your main purpose is to have a credit card so that you can make big-ticket purchases but you also do retail shopping frequently. In this case, a basic credit card with extra rewards on retail shopping or departmental store would be good.
2. Understand your eligibility and credit profile
Once you know your needs, you should be able to understand your own credit profile to find out which credit cards you may be eligible for.
Credit score is an important parameter that card issuers use to judge your eligibility. Credit bureaus like TransUnion CIBIL, Experian and Equifax assign credit scores to individuals based on their credit behavior, payment patterns, credit utilization ratio, etc. Better the credit score, the more will be your chances of approval.
At Paisabazaar.com, you will also get suggestions about credit cards and other products matching your credit profile. If you wish to apply for a particular credit card and a low credit score is coming as an obstacle, you should find out the reasons and work towards improving your credit score. Paying your bills on time and reducing the utilization ratio are a few ways to go about it.
3. Narrow down your choices
The next steps is to narrow down the credit cards choices to find the one that best matches your needs. You can do this by asking the right questions. Some important questions to ask include:
- Will this card help me fulfill my core needs? (Refer to Point 1)
- What will it cost to get this card and maintain it?
- Can I switch to a better card at a later date?
- What are the terms of card usage?
- Will I get useful rewards on this credit card?
- How complicated is the rewards/miles program of this credit card?
Basically, you should look for cards that meet your primary need in the smoothest manner. A credit card that matches your need but has too many terms and conditions associated with it may leave you confused. A lot of users give up on delving deep into the usage terms and cannot make the most of their rewards and benefits.
Suggested Read: Follow These 7 Strategies to Optimize Your Credit Card Rewards
4. Find the credit card with highest overall value
After narrowing down your choices, you should have arrived at 2-3 credit cards. The hardest part is to choose one from these.
When you shop for a shirt, you look for one that fits you the best, looks good and also falls in your budget. Similarly, with credit cards, you should choose the one that best fits your needs, compliments your budget (instead of eating into it) and does not charge too much in fees. Take a futuristic approach as to how you would use the card and what terms and conditions would deter you from sticking to your spending habits. Filter the cards and select the right one.
5. Choose how to apply for the card
Nowadays, credit card application has become very simple. You just need to visit the bank’s website, check your eligibility, fill an application form and submit. However, on a particular bank’s website, you can only check the offers by the same bank and hence would not be able to compare it with other banks’ credit cards. This way you could miss out on some other credit card offers.
Paisabazaar lets you search for the right credit card, compare and apply online without any hassle. On Paisabzaar.com, you can apply for a credit card in a few simple steps:
- Click here to start your application process
- Enter your mobile number, income and occupation details and whether you have credit cards
- Filter the results if you are looking for a particular card or browse through the cards you are eligible for and select the right one
- Check eligibility for the said card by entering some more details
- Enter your personal details and PAN to proceed
- Enter more details as asked and when completed, submit the form
After this, a representative from the bank will give you a call to take the process further. One of the field personnel will also come and collect the documents from your home or office location. The bank will then verify the details. If the card issuer is satisfied with your profile, they will issue the credit card and it will reach you in 7-10 business days.
Choosing the right credit card is important but the next step is to make proper use of the available benefits. Make purchases that give you the best rewards, keep track of your reward points and optimize the benefits as much as you can. Also, pay your credit card bills on time to avoid paying the late fee and the high finance charges. With regular usage, you will learn more about how to use credit cards in your favor.