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.