With a credit card in your wallet you do not have to worry about compromising on lifestyle expenses, and you can easy fund emergency or impulse expenses, such as a unplanned medical procedure or a weekend getaway to surprise your spouse. Using a credit card is amply beneficial as you can access a high corpus when you need it. Unlike loans, you do not have to complete a lengthy procedure to apply either. Moreover, you have the option of converting your expenses into EMIs to keep things pocket-friendly. However, when you decide to apply for a credit card you will have to look for one that not only offers flexibility, but is also highly cost-effective.
Here is a list of 4 important things that you must consider before applying for a credit card.
Understand the difference between a secured and unsecured credit card
Secured credit cards are backed by a cash deposit. This means an issuer is likely to give you a secured credit card based on the investments you have with the financial institution. Here, your credit limit will be decided basis the total amount you hold in savings or as investments. In most cases, if your credit score or credit report does not match the issuer’s terms, you can get a secured card in this manner. But choose this option only if you’re sure of being able to service the card or else you’ll risk losing your investments. On the other hand, high credit score and good income will fetch you a feature-rich unsecured credit card.
Understand how the issuer can charge interest on your credit card
If you use a credit card as it is supposed to be used, which means paying the bill in full each month, it will not attract any interest. However, if you pay the minimum due, the balance will attract interest that can go up to 45% a year. Each month your issuer will combine the total transaction value and add charges to determine your bill amount. An average of this amount computed via the percentage, or percentage + fees + interest method is your minimum due. Needless to say, paying the minimum due is absolutely essential, but paying the full amount is ideal.
Understand the other charges applicable on your credit card
When you apply for credit card, along with the interest charges you must also consider the additional charges an issuer may levy. Definitely talk to the issuer or visit the online portal to understand what these are. Compare cards basis their charges and benefits to understand which one is best for you. If you travel internationally often, then choose a card that doesn’t levy a fee each time you transact abroad.
Also, steer clear of promotional cards unless you’re willing to check them thoroughly. They offer you exciting rewards and perks during the promotional period which may seem like reason enough to apply. However, afterwards you may end up paying much more.
So, it’s best to steer clear of them or check the terms and conditions diligently before you apply!
Understand the reward plan of the credit card
Generally, a credit card offers rewards to help you cut down on expenses. Once you accumulate points, you can use them to pay for other transactions. Your goal must be to choose a card that offers accelerated or extra points on the transactions that tie in with your spending habits. For example, if you enjoy shopping, look for a card that gives you twice the points when you shop online. Similarly, if you are passionate about food pick a card that gives you 5 times the rewards for every dining experience, for instance.
When you take the Bajaj Finserv RBL Bank SuperCard, you can get a bouquet of rewards bundled into one card. Get welcome rewards of up to 20,000 points on joining the SuperCard club and enjoy additional benefits such as interest-free emergency loan for up to 90 days, cash withdrawal without any charge for up to 50 days, easy EMI conversion of purchases of Rs.3,000 or more, and robust security. With reward points on every transaction, you can save up to Rs.55,000 per year!
If you are wondering how to apply for a credit card online, doing so with Bajaj Finserv is easy and quick. Check your pre-approved offer from Bajaj Finserv to unlock your instant credit card offers and get a credit card in a flash.