Credit Card

• Choose a card that aligns with your lifestyle. Look for benefits in your major spending category like travel, online shopping, offline shopping, etc.
• Identifying the cards which you are eligible for. Beginners or low-income applicants qualify for entry-level cards, while high-net-worth individuals can get premium options.
• Entry-level credit cards come with lower fees whereas mid-range or premium cards generally charge a higher fee. Decide if you would like a low-fee card with basic benefits or pay a higher amount for better benefits.
• Do a cost-benefit analysis, and review t&c on annual fees, rewards capping, redemption options, and values. Ensure you can maximize spend-based benefits before deciding.
• Avoid applying for multiple credit cards at the same time as it may have a negative impact on your credit score.

Pay your balance in full and on time

The most important rule of credit card usage is to pay your balance in full before the due date to avoid interest and protect your credit score. If you cannot make the full payment, try to pay more than the minimum, which can reduce the interest charges.

Convert large purchases into EMIs

If you make a large purchase, consider converting it to EMIs, which usually comes with a lower interest rate than the standard credit card rate. This way, you can manage the entire expense in smaller and more manageable payments over time.

Avoid cash withdrawals with your credit card

Cash advances do not offer an interest-free period; instead, interest is levied as soon as you withdraw cash. These charges can quickly accumulate debt, so use cash withdrawals only as a last resort.

Keep track of your spending

Monitor your spending to stay within your credit limit and avoid building up a difficult-to-manage balance. Check all SMS alerts and your bank statements carefully about credit card transactions. Besides this, you should also check your credit report at regular intervals to notice and rectify any errors.

Do not apply for multiple credit cards at a time

Applying for too many cards at once can make you look credit-hungry and lower your credit score due to multiple hard inquiries. While a single inquiry may not have significant consequences, multiple inquiries within a short period can negatively impact your credit score. Hence, apply only for cards that truly meet your needs and spending habits.

Here are some do’s and don’ts for using your credit cards wisely:

Some recently launched credit cards are:

• HSBC Taj Credit Card: India’s first hotel co-branded credit card in the super-premium segment, with an annual fee of Rs. 1.10 Lakh. Cardholders can earn exclusive privileges not only at Taj properties but also across other hotel chains within the IHCL Group
• Times Black ICICI Bank Credit Card: A premium metal card co-branded with Times Internet Ltd, tailored to meet lifestyle and travel needsft of the premium segment. At an annual fee of Rs. 20,000, this card offers high-end benefits such as unlimited lounge access, milestone benefits worth up to Rs. 70,000, and other exclusive lifestyle benefits
• BOB Tiara Credit Card: An all-rounder credit card designed to cater to various categories such as travel, lifestyle, dining, and more. This card stands out by offering exclusive health and wellness benefits tailored specifically for women. Additionally, it offers travel benefits like unlimited domestic lounge access and a low forex markup fee of 2%
• MakeMyTrip ICICI Credit Card: Suitable fit for travellers who prefer MakeMyTrip for travel bookings. The card offers up to 6% value-back over and above applicable discounts on MakeMyTrip
• KrisFlyer SBI Credit Card Apex: The premium variant of the co-branded credit cards by SBI Card and Singapore Airlines. In comparison to the base variant this card offers 10 KrisFlyer miles for every Rs 200 spent

While the eligibility criteria may differ across issuers and cards, some general requirements are:

• Age: Minimum 18 years
• Credit Score: Preferably 700 and above
• Employment Type: Salaried or Self-employed

To process your credit card application, you need to submit the following proofs:

• Identity & Signature Proof
• Address Proof
• Age Proof
• Income proof

Some common documents are PAN card, Aadhaar card, employee identity card (in case of Government employees), bank statement, salary slips,  rent agreement, or utility bills. For self-employed applicants income proof requirements may vary. You need to submit ITR documents, Form 16, etc.

Note: Document requirements may vary.

Credit card fees and charges can vary based on the card type and issuer. Some charges, like joining or annual fees, are required to keep your card active, while others - such as finance charges, cash withdrawal fees, and late payment fees - apply depending on your card usage. Here’s a look at some common charges:

Particular	Charges
Annual Fee	Varies from card to card
Finance Charges	9% p.a. to 52.86% p.a.
Interest-free Period	Up to 50 days
Cash Advance Charges	0% to 3.5%
Forex Markup Fee	0% to 3.5%

Choosing the right credit card is subjective based on your profile and requirements. To make a wise choice, here are some suggestions:

Identify your preferred spending category

There are different types of credit cards, such as travel, shopping, dining, etc. To maximize the benefits of a credit card, you should analyze your shopping habits. The best credit card for you would be one that fulfills your core needs. For instance, if you frequently travel, choosing a credit card that offers accelerated benefits on travel spends would be beneficial for you.

Shortlist cards based on your eligibility 

Once you've identified your shopping pattern, start by shortlisting the cards based on eligibility. Understand your credit profile & find out the cards you may be eligible for. To do so, you can also check your eligibility at Paisabazaar for pre-qualified card offers.

Evaluate features & benefits

After shortlisting the preferred credit cards, the hardest part is to decide which credit card to choose. To find the right card, you must evaluate all the features and benefits of the respective card and choose the one that fits your needs and complements your budget.

Read the fine print

Once you’ve decided which card to apply for, review all the related fees & charges associated with the card. Analyze whether you will be able to pay the associated fees. Apart from the annual fee, also check for other related charges, like interest rates, late payment fees, etc., to make an informed decision.

Most credit card issuers prefer applicants with a good credit score (preferably above 750). While some issuers offer entry-level credit cards for new-to-credit individuals, getting approval can still be challenging. If you’re struggling to get a credit card and want to start your credit journey, you can consider applying for a secured credit card.

Secured credit cards are issued against collateral, such as a fixed deposit. These cards function just like regular credit cards but usually come with basic benefits. The credit limit is assigned as per the fixed deposit’s value. Even students and unemployed individuals can apply for secured credit cards, making them a great option for building credit.

You can use secured credit cards for both online and offline transactions, just like a regular credit card. By paying bills on time, they can help you build a strong credit profile. In case of any default payments, the outstanding amount is recovered from the fixed deposit.