6 things to keep in mind while you choosing a credit card

If you think credit cards are just another payment tool, you may be wrong. Smart and disciplined use of your credit card can help you save more on your expenses and enrich your lifestyle experiences at no cost if you pay your installments on time to avoid interest charges. (which is usually less than 3% to 4% per month) and if you don’t have to pay any membership fees for the card.
That said, choosing a credit card whose benefits align with your unique spending pattern and budget is the key to maximizing the value of your card’s expenses. So if you are planning to get a credit card, here are some important things to keep in mind when comparing your options.
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1. Eligibility
Most of the banks in the country offer several types of credit cards. However, you may not be eligible for all credit cards. Some card types have higher income and credit score requirements. The point is that you should always search and compare credit cards as per your eligibility and avoid applying for cards for which you are not eligible to reduce the chances of application rejection and your credit card due to difficult inquiries. There has been an unnecessary drop in the score. .
2. Align the benefits of the card with the way you spend
Also, not all credit cards that you are eligible for will better suit your needs. Credit cards come with a variety of basic benefits such as cash back, reward points, airline miles, etc.; However, it would be ideal to choose a card whose benefits suit your spending pattern. For example, if you don’t own a car and plan to use your card primarily for online purchases, you should choose a card that offers additional discount or reward points on online purchases and No fuel refills.
It’s important to align the card’s core benefits with frequent spending categories to maximize benefits. You should also read the fine print for complete clarity on the benefits you will receive, such as limiting reimbursements, redemption options for reward points and conversion rates, etc., and try and better assess the true value proposition of your benefits. Make your choice.
3. Budget
Now suppose you’ve shortlisted a few cards based on your preferred spending categories, but how do you figure out which card works best for you? You should choose the option that allows you to maximize the benefits of the card while staying within your monthly budget for card expenses. For example, if your card has a monthly spending budget of Rs 20,000, then you should go for a variant that offers 10% refund for eligible spends up to Rs 20,000. This can help you save Rs 2,000 per month (or Rs 24,000 in a year) on your expenses.
If another card offers similar benefits but the spending requirement limit exceeds Rs 40,000, your budget will not allow you to maximize the card’s benefits. The point is, you should never exceed your card spending budget to maximize benefits and ensure that you can easily settle your outstanding total within the interest-free period of each billing cycle.
4. Credit Limit
Banks determine the credit limit attached to the credit card account based on the income and credit score of the applicant, among other things. In other words, different banks may offer you different credit limits attached to a credit card depending on your income and credit score. But you might want to go for a card variant that has a higher credit limit. This will help you to keep your credit utilization ratio below 30% which with a good credit score signifies a good deal.
However, keep in mind that a higher credit limit doesn’t mean a license to spend more than your budget. This gives you a little more headroom, protects your credit score, and also enhances your eligibility to apply for premium credit card variants in the future if you have high spending needs urgently.
5. Annual Fee
While there is no dearth of zero annual fee credit cards in the market, sometimes these are the basic versions with limited benefits. So if you’re looking for a premium credit card with advanced benefits, you can consider opting for a variant whose annual fee doesn’t hit your budget, and more importantly, when The benefits of use outweigh the subscription fee. Additionally, many annual fee credit cards also come with an annual spending target — if your budget allows you to meet those goals, your annual fee will automatically be waived during renewal.
6. Additional Benefits, Privileges and Perks. 
Most credit cards come with perks, privileges and features apart from core benefits such as cash back and reward points, and you should choose a card whose added benefits suit you best. These additional benefits may be complimentary travel insurance, free access to lounges, bonding gifts, option to borrow from your credit card, easy EMI facilities, special discounts or promotional offers when you buy from particular brands or on specific e-commerce sites. You can make hotel reservations based on the type of card and select restaurants etc. These attractive benefits can make your credit card experience even more pleasant. So don’t ignore them.
Finally, it can be a little difficult to find a credit card that ticks all these boxes at once; However, a card that greatly encourages your major spending categories while staying within your budget and offering a wide range of useful benefits and privileges. It can be good enough too. But whatever card type you choose, be sure to spend smart and stay within your means to easily avoid interest charges and negatively impacted credit scores.
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