While a credit card Tips is a powerful tool for managing expected and unforeseen expenses, it is imperative to choose a card wisely by assessing the various costs and benefits related to it. Even though they help build credit health and save a lot of money, there are numerous other creditcard benefits as well as terms of usage one should be aware of before selecting one to avoid any misconduct in the future.
Read on to know more about the essential things to consider while purchasing a credit-card.
- APR or Interest Rate
The annual percentage rate is referred to as the bank’s interest rate if the credit card bill is not paid in full within the due date. In case of partial payment by the borrower, a fixed APR is charged on the outstanding amount, and it may increase over time and become a burden. Because APR rates depend on multiple factors, including the candidate’s income and credit score, one must be aware of the interest charged by the issuer before purchasing a credit card.
- Credit Limit | credit card Tips
A credit limit refers to the upper limit of expenditure via a creditcard offered to the borrower without charging an over-limit fee. While the limit is usually determined based on the candidate’s income, credit score, and financial condition, you can get a higher credit limit upon purchasing a credit from the bank already with whom you already hold a salary account or fixed deposit.
- Various card charges
There are several charges to keep track of while purchasing a credit card Tips. One must be aware of joining fee, annual or membership fee, balance transfer fee, cash advance and withdrawal charges, foreign transaction fees, and duplicate statement fees. In addition to it, the card replacement fee and cheque bounce fee charged by the bank must also be checked before making the final decision.
- Credit utilisation ratio
To prevent any harm to your credit health, one must be aware of the credit utilisation ratio (CUR) to keep a check on your expenditure irrespective of the offered credit limit. Defined as the percentage of available limit you use, the ratio must be below 30% for maintaining a healthy CIBIL score if you need to avail of a loan in the future.
- Rewards
A key focus while purchasing a credit card should be given to the issuer’s reward programme and discount vouchers on multiple products and services. While some cards earn you frequent air miles or cash-back on shopping brands, others offer you a chance to earn free goodies or discounts on fine dining experiences. One should carefully assess the multiple benefit schemes available in the market and select the card best suited to their lifestyle, which complements their preferences and interest.
See Also- How to get a credit card for self employed?
- Bonus Benefits
Before finalising, you must also pay attention to additional credit card benefits, such as choosing an attractive EMI scheme to convert expensive purchases into affordable instalments. Besides the existing benefits, make sure to analyse bonus rewards associated with the card that maximises savings on online and offline stores you visit frequently.
