Choosing the best credit card in India can be an overwhelming task. There are numerous options available in the market based on the specific needs of customers. Each credit card has different features and benefits, depending on how you want to use them. For instance, there are credit cards that help you build your credit score and then, there are those that come with maximum benefits, such as rewards, bonuses, no-interest periods, etc.
There is no single credit card that defines the term – best credit card in India . Each credit card caters to specific requirements of the borrower. Here are the top tips you can use to choose your best credit card
Check your credit score
Your credit score is one of the crucial factors that can help you identify the type of credit card you can get or qualify for. If you wish to buy an online credit card that comes with reward programs, cashback, bonuses, and promotional interest rates, it is imperative to have an excellent credit score. The minimum credit score requirement to get such a credit card is 750.
After checking your credit score and knowing your credit score range, you easily fine-tune your search. A golden piece of advice would be to look for credit cards that require a credit score less than what you have maintained. If you do not have an excellent credit score, do not worry. It is not the only factor that most lenders consider. Your income and monthly housing payments can improve your chances of approval for an online credit card.
Define your type of credit card
After checking your credit score, you will need to look for online credit cards that best fit your needs and preferences. Generally, there are three types of credit cards, such as rewards, 0% APR, and build credit. If you have an excellent credit score, it would be wise to opt for a rewards credit card. You can significantly reduce the total cost of purchases. You can always redeem your credit card reward points to pay for gift vouchers, hotels, airfares, etc.
0% APR Card: as the name suggests, it offers an interest-free period during which you can make purchases and transfer balance without paying interest. You will find banks that offer 0% APR for up to 19 months on balance transfer and new purchases. The best part is that you can save on interest for a minimum period of 9 months. So, if you want to make large purchases, it is better to get a 0% APR credit card and avail of no interest charges while making repayments.
Building a credit card: If you have a low credit score, then you can apply for a secured credit card to build your credit score. You will have no reward to avail of, but the interest rates are attractive. Upon improving your credit score, your chances of getting reward cards increase significantly.
Consider interest rates and penalties
Interest rate terms vary across online credit cards in India. It appears as the Annual Percentage Rate on your credit card. It is either a fixed rate or variable rate linked to the prime rate. With a fixed APR card, the interest rate remains fixed throughout the months. A variable-rate keeps fluctuating. The interest charges are applicable only if you carry your credit card balance from month to month. It means that you will not have to incur interest charges if you pay your credit card bills on time.
There are also other charges you will have to watch out for. For instance, transaction fees, balance transfer fees, and cash advance charges. You will have to incur penalties for paying your credit card bills late or going over the credit card limit. So, while choosing the best credit card in India, it would be wise to choose an online credit card that offers reasonable interest charges. For instance, if you are transferring your balance, you must be able to avail of no balance transfer fee and an interest-free period for at least 12 months.
Using your online credit card is the best way to manage your money during a cash crunch. However, you will have to use your credit card wisely to avoid interest charges and other penalties. While buying a credit card, make sure that it best serves your needs and preferences.