The easy availability of pre-approved card offers has made it simpler to apply for a credit card, however, the question is, should you jump at the idea of getting a credit card with a pre-approved offer? Or you should give it a thought before applying for the same?
Credit cards should be chosen after assessing your spending requirements and comparing all the options available to you. The best credit card for you would be the one that matches your lifestyle, spending preferences, income eligibility, credit score and more so that you can make the most out of it.
However, with so many credit cards available in the market offering benefits across different categories like shopping, travel, cashback, rewards, dining, movies, it can be quite difficult to pick one. To make your search for a right credit card easier, here we have listed the factors that you should consider while choosing a credit card.
understand your requirements
When looking for a credit card, you should have a few things in your mind about what to expect from your new credit card. Whether you wish to spend heavily and earn high rewards/cashback or you want to make your foreign trips more economical or anything else- it is important to know your requirements clearly. Once you know what to look for in a card, the search will be easier. To help you shortlist the right type of credit cards, here are some popular credit card categories:
- Credit Cards for Beginners: Such credit cards usually offer basic features with no added perks and usually come with a low annual fee.
- Travel Credit Cards: If you are a frequent flyer, you can apply for a travel credit card such as complimentary lounge access, co-branded privileges, air miles, etc.
- Shopping Credit Cards: Such credit cards are designed to provide benefits exclusively to shopaholics. You can get rewards/cashback/discounts on shopping both online and offline.
- Rewards Credit Cards: You can apply for a reward credit card if you want to avail rewards across all categories along with accelerated rewards on select spending categories.
- Cashback Credit Cards: These cards offer direct cashback and are well-suited for those who would like to get simple straightforward value back on their purchases.
- Fuel Credit Cards: If you want to save your fuel expenses, apply for a fuel credit card that helps you save in the form of extra rewards, co-branded benefits, and fuel surcharge waiver.
Consider the annual fee and other charges
You may find several credit cards that match your requirements, however, you also need to take into consideration the annual fee you are willing to pay. For example, super-premium credit cards come with excellent features such as unlimited international airport lounge access, low foreign exchange markup, generous reward rates, etc., but they also charge a hefty annual fee for these features, which could go up to Rs . 20,000. This is why it is important to find a card that suits your needs as well as falls in your budget.
Consider the Credit Cards you already have
If you already have a credit card or two and wish to get another, you must choose a card that offers a different set of benefits than the ones you already own. For example, if you have a credit card that comes with a high reward rate, it is advisable to look for other features in your new card such as travel perks or cashback or co-branded benefits. This way, you will be able to make the most of different types of benefits. You can also consider choosing a different provider as you will have a better chance to avail provider-specific limited period offers on e-commerce portals.
Check your eligibility
Different credit cards come with different eligibility criteria and the most important of these is the minimum income. If you do not meet the income eligibility for a card, it is best not to apply for it as there are high chances of rejection. Another important consideration is your credit score. The credit score reflects your financial health based on your credit behavior. It usually ranges from 300 to 900. The closer your credit score is to 900, the better are your chances of success when applying for a credit card. The card issuers will check your credit score in order to determine whether you are credit fit to avail another card or not. If you are new to credit or have a poor credit score, you would have limited credit card options to choose from.
Compare Credit Card Offers Online
Even if you are pre-approved for a credit card, it may not be the best fit for you as you might be eligible for better credit cards. This is why it is always good to shop around before you select a card. Visit different card providers online to see the type of cards they are offering and the annual fees charged. Suppose you are looking for a cashback credit card, you will find such cards from 2-3 different providers but each card will be designed to offer cashback on different categories. Comparing will allow you to understand which cashback card fits your lifestyle perfectly.
The best credit card for you should be a combination of all the things mentioned above- it should offer the right set of benefits to suit your needs, it should have an annual fee that you are ready to pay and you should be eligible for it. The right way to start your search is by understanding your requirements, shortlisting cards and then applying for the one for which your chances of approval are the highest.