India Broadband Forum

Rameshjeee

How to select the right credit card

Today it is difficult to come across a person who doesn't own a credit card. With the rise in standard of living, banks are coming out with increasing number of cards offering number of innovative features.

While it increases the number of options open to the customers, this innovation can also confuse the person looking to own his first credit card. As a result, it is very important for you to choose the right credit card so that you can get the best out of credit card.

We answer some of your questions on how to select the right credit card for your needs.

What card is ideal for me?
As the features offered by each credit card varies, it is essential for you to understand which features will benefit you a lot. If you are shopping regularly at a particular store, go for a credit card that offers your reward points or cash back or discount when you shop at that store.

Don't select a card that offers you free air miles on usage, if you are not a regular flier. Do you use the credit card to pay your utility bills? Then choose a card that provides you benefits for paying your bills. Besides rewards, also take a look at the interest charged.

If you intend to carry outstanding balances each month, then it is advisable to choose a card offering a low interest rate. But if you can manage to pay off the balance in full at the end of each month, it is advisable for you to go for a card with high interest rate but with low or nil joining and annual fees.

If you are traveler, check out if the card has widespread acceptance.

What are the important features my card should have?
Though cards contain many important features, some are the more important than others. While we all like to be rewarded for using the card, it should not be the sole criterion affecting your decision.

Instead here are some essential features to look at when choosing a card.

• Annual/joining fee: While most banks offer entry level credit cards for free, these fees are still levied on the high end credit cards meant for businessmen. If you happen to pay your card balance each month, then these fees will make it expensive for you to use the card. In this case, it makes more sense to opt for the card that doesn't charge any such fees.
  
• Credit limit: If you are a heavy shopper, always select the card offering you the highest credit limit. It will prevent your card from being rejected due to insufficient credit limit.
  
• Cash limit: Do you always swipe your card to withdraw cash in case of emergencies? If yes, then you must always take a look at the cash withdrawal limit available on the card.
  
• Interest rate: Do you always like to carry unpaid balance each month? If yes, then always select a card charging lowest interest rate, as high interest can very easily land you in debt.
  
• Acceptability: Is your card accepted across wide range of establishments? Is it accepted internationally? While Visa and MasterCard are universally accepted, Diners and American Express have limited acceptability.
  
• Other charges and penalties: Besides fees and interest, remember the bank also charges you various other fees like late payment fees, cheque bouncing fees, over limit fees etc. Watch out for these fees, as they are very high.
  
• Quality of service: Not all banks provide the same level of customer service. Check out if the bank offers 24x7 customer service for its credit card customers. This is helpful if you have to report stolen card, check your credit limit or want to discuss any billing problem with the customer service.

How do I compare these features?
While you can visit the websites of various banks, and go through the details of their various card products, it can be time consuming and inconvenient.

Source: Rediff

aryayush

Thanks. That was a useful bit of information.

[Try posting excerpts from the original story instead of posting the whole thing though.]

Mr.Tooth Fairy

well anyone knows is there any kind of extra charges on international transaction in $? i mean do we have to pay some extra money other than wat the currency rates at tht time??

the info will be more useful if ICICI bank info particularly.. thanks.

just4kix

I have used my CC extensively abroad. There are no extra charges but the exchange rate is higher by almost 50 paise.

18lama

^ I know for a fact that all foreign transaction on an axis bank gold CC have a 3.5% additional charge.

kirankumargb

useful info..

just4kix

Then Axis bank is fleecing you. There is no rule that says that Forex txns can be charged extra.

I have been using my ICICI credit card abroad since 2001 - I was tentative at first. But I never found any extra charges (apart from a slightly higher exchange rate).

18lama

They are not fleecing me, I read the info on their site.

See this: Axis Bank | Services Charges and Fees

see the part about Foreign Currency Transaction Fee.

panchabhut

before choosing any credit card,

be very clear as the the exact issuer of the card
several credit cards (incl. SBI Card) is not issued by the bank but by a subsidiary or a joint venture. Only cards issued by the Bank itself is covered by the Banking Ombudsman redressal mechanism. Do not go for a card that is not issued directly by the Bank.

inquire about the credit points
almost all banks offer credit points on transactions. but only a few offer the option of redeeming these for cash or cash equivalent and most offer redemption against gifts and trinkets that u may not require. A card that allows cash adjustment against reward points is always better.

never select a card by the cash limit
withdrawing cash from a credit card is worse than taking money from a underworld don. there are transaction charges and finance charges and service tax and what not. in most cases, the effective interest rate works out to more than 50% p.a. better to have a overdraft facility with your salary account banker for those emergencies or have a few linked FD with your savings account that gets automatically broken when you withdraw cash more than your account balance.

vikramjb

Rameshjee adding the rate of interest for the current list of CC will be extremely useful for people thinking of going for one.

alok7870

While you can visit the websites of various banks, and go through the details of their various card products, it can be time consuming and inconvenient. Instead you can use the credit card comparison web sites like bankbazaar.com which offer you a snapshot of the various features of different credit cards. It makes your task easy and helps you in taking a faster decision.

teju23451

Yes your are correct credit card is turning out to be one of the Basic Essential in our life. As it is useful for every purpose. For shopping, restaurants, Pubs, Theaters. I had faced a lot of trouble with out it. Some don't allow people who are not having cards. I had bought one last week.

just4kix

Which credit card to have? Depends upon the country also.

For instance, in India, American Express or Diners Club is not accepted at many places - Visa or MasterCard only.

panchabhut

And there are some places where only Amex is accepted.
I think now Diners Card have certain arrangement with MasterCard.

noserver

is good article i really like, but is still not make me like CC and the company...