There’s little doubt that today the credit card is one of the most popular and sought-after financial products in the market. Owing to its high demand, the market is filled with credit cards aimed at every spending category.
And this is precisely why it’s not surprising if you get confused while trying to figure out the best credit card for yourself. Choosing one among the numerous available options isn’t a cakewalk but you would get a clear picture if you follow the credit card comparing tips listed here.
- Ascertain the category: This is perhaps the most crucial factor to be taken care of. The first step to compare various credit cards is to figure out the category of the card that you need. If you are a frequent traveller, you should go for a travel credit card.
- Know the credit card type: Here, you have to choose from options like silver cards, gold cards, regular cards, platinum, titanium, etc. The type of the card you are eligible for would primarily depend on your income along with a few other factors.
- Interest-free period: Also known as the grace period, this is the number of interest-free days that you enjoy on your credit card expenses. This can typically extend up to 50-55 days depending on the date of the expense with respect to the monthly credit card bill generation date.
- Reward points: One of the attractive features that almost every credit card offers is the reward points program. Most credit cards give you reward points when they are used for transactions across a wide range of categories. The accumulated points can then be redeemed for attractive gifts and benefits.
- Interest rate: Another factor that is very important to consider is the rate of interest that you would be charged on your card transactions. Because the interests start accumulating right after the grace-period (from the date of transaction for certain spend categories), try to get a card that has a relatively low-interest rate.
Likewise, if you are a foodie and spend the most on restaurants and dining out, check out the best options on the dining category. Other popular categories include cashback, daily expenses (including groceries), online shopping, etc.
The major difference between these card types lies in the features and benefits that they offer.
So check out the best credit card in terms of the interest-free period. This would certainly help you in enhancing your experience of using a credit card.
So check out the cards which would give you the highest reward points on the categories on which you spend the most.
Things to do when comparing different credit cards
- Check other fees and charges: Apart from the regular interest rates, there are a host of other associated fees and charges that would be levied on your credit card account. The common ones among these are joining fee, renewal fee, ATM cash withdrawal fee, late payments fee, foreign transaction fee, etc.
- Proper selection of the mode of comparison: The method which you employ to achieve a fruitful comparison is also something that should be selected carefully. There are numerous websites and mobile applications which would help you to arrive at the best credit card.
So it’s wise to search for the card that has the best fees and charges for you. That way, you can save a substantial amount of money in the long run.
Another way is to do it manually by creating a suitable comparison format on a piece of paper. You can get the information about different cards from the internet, and then list them all in a tabular format that you can easily create.
The method that you choose depends on the time that you can afford to invest and the information that you can manage to get hold of.
Things to avoid when comparing different credit cards
- Falling for the introductory offers: In order to attract potential customers, credit card issuers roll out several introductory offers that are not only tempting but also highly useful. These may include reward points in bulk on the first transaction, a lower interest rate for the initial few months, special discount on shopping or dining, etc.
- Not checking out the credit limit: The credit limit on your card is the maximum credit that is available to you through the card. Usually, individuals seek a high credit limit on their cards as it makes them easily pay all their monthly expenses without having to worry about exhausting the entire credit amount.
However, be careful not to decide on the card depending only on the introductory offers. Ensure you consider the other crucial points mentioned here as well.
The banks determine your credit limit after accessing your credit score, the stability of your income source, your annual income, etc. But you could also conduct research to arrive at the best card issuer who would give you a higher credit limit as compared to other issuers.
Bottom line: The benefits of well-conducted research before deciding on a credit card that you would apply for is not just wise but a crucial necessity. Always bear in mind that the right credit card can do wonders for you, while a wrong one (the card which is not suitable for your use) can add to your financial worries and burdens in place of rescuing you from them.