When finding the right credit card, one of the primary concerns should be its eligibility criteria determined by respective lenders. Although the brackets of these qualification parameters can differ depending on the credit card provider, some measures are standard. For example, a promising credit profile with a CIBIL score of around 750 is compulsory to avail a feature-rich card at cost-effective terms.
Thus, when learning how to choose credit cards that fit their lifestyle, individuals should be careful about their credit history, CIBIL score, etc. Applying for a card as per financial record can help to enhance approval chances and protect the profile as well.
Below are some tips to select the perfect credit card-
- Understand the objective
As obtaining a credit card is a critical financial decision, individuals need to evaluate the reason for it. In other words, if they know the objective behind availing a card, they can streamline their searches as per the category.
For example, if the primary intention is generic shopping, individuals should look for a card that serves for all such purposes and offers 3 – 5% cashback on spending. Therefore, it is important to understand the purpose when knowing how to choose credit cards.
- Find out the expense habit
Analysing the spending pattern also stands out vital to pick the perfect card as per lifestyle need. If applicants can conclude their expense orientation, they can also understand what they should look for in a credit card.
For instance, those who tend to spend a significant amount on fuel can look for fuel credit cards that offer surcharge waivers and reward points on these specific transactions. Similarly, for a frequent traveller, a travel card that provides incentives on hotel booking or free travel miles can be an apt choice.
- Right credit limit
The credit limit suggests the entire sanctioned amount that cardholders can utilise as per their requirement. Nonetheless, using the total amount can represent higher default risk to financiers and thus, it affects a user’s credit score.
Therefore, it is advisable to keep the credit utilisation below 30% of the permitted limit. That means, with a credit limit of Rs.40,000, individuals should not exceed their expense any more than Rs.12,000.
So, choosing the correct financial institution that can offer the appropriate limit is a vital factor when applying for a credit card online. Individuals must remember that they have to manage both financial requirements along with the ratio.
- Affordable charges
The charges on a card include the interest and annual charges along with others like transaction charges, balance withdrawal fees, processing fees, etc.
Therefore, applicants need to be careful about all these charges when they choose the right credit for themselves as they can accumulate a significant payable amount.
If cardholders can be organised and particular about on-time payment, they don’t have to pay the interest as it can only be charged if they carry an overdue balance. Contrarily, when it comes to cash withdrawal, the majority of card providers charge interest right from the transaction date until borrowers repay in full.
Individuals can opt for credit cards like the Bajaj Finserv RBL Bank SuperCard, which provides the facility of ATM cash withdrawal without any interest for up to 50 days.
Moreover, the NBFCs also present pre-approved offers to simplify the process to avail financing. Other than credit cards, pre-approved offers are also applicable to several other financial products like business loans, personal loans, etc. Individuals can view their pre-approved offers by entering contact numbers and names.
- Easy documentation
Applicants also need to submit a few essential documents that can verify their eligibility. Usually, these include income proof, KYC documents, etc. However, based on financiers, these documents can vary.
Lastly, when understanding how to apply for credit card and choosing the best one, individuals should also consider the usability of affiliated reward programs. With the help of these benefits, they can reduce their future expenses significantly.