How To Choose a Credit Card: Tips And Tricks

It might be difficult to figure out which credit cards are a good fit for your wallet—and which should be avoided—with so many credit issuers vying for your business.

Don’t worry; the answers to your credit card conundrum are easier to come by than you would think.

What credit card should you apply for? It’s only a matter of assessing your priorities when it comes to selecting a credit card.

Before you choose a credit card, think about what your card’s primary purpose will be.

Perhaps you’re looking for a first-time card to help you establish credit, or a rewards card to help you earn airline miles. Whatever the case may be, your credit card soulmate exists, and we’re here to assist you in finding it.

As you start looking at different credit cards, there are a few things to keep in mind.

Use the following checklist as a guide:

  • Qualifications:

Most banks in the country provide a variety of credit card options. You may not, however, be qualified for all credit cards available. Some cards have high income and credit score criteria. To summarise, you should always seek and compare credit cards based on your eligibility and avoid applying for cards for which you are ineligible to reduce the likelihood of application rejection and an unnecessary drop in your credit score due to hard inquiries.

  • Benefits of your credit card are aligned with your spending habits:

Furthermore, not all of the credit cards that you are eligible for will be the ideal fit for your needs. Credit cards offer a variety of key perks, such as cashback, reward points, and air miles; nevertheless, you should choose a card with benefits that are consistent with your spending habits. If you don’t own a car and plan to use your card primarily for online shopping, choose a card that pays extra cashback or reward points on online purchases rather than fuel refills!

To maximise the benefits, core card benefits must be aligned with common spending areas. You should also read the fine print to acquire a thorough understanding of the benefit riders, such as cashback caps, reward point redemption possibilities, and conversion rates, and try to analyse the true value proposition of its advantages to fine-tune your choice.

  • Budget

Assume you’ve narrowed down your options to a few cards based on your chosen spending categories. How do you decide which one is best for you? You should choose the option that allows you to get the most out of your card advantages while staying within your monthly card spending budget.

  • Maximum credit limit

The credit limit associated with a credit card account is determined by the applicant’s income and credit score, among other factors. As a result, depending on your income and credit score, different banks may offer you different credit limits tied to credit cards. However, you may wish to use a card with a high credit limit. This will assist you in keeping your credit utilisation ratio below 30%, which is incredibly beneficial to a decent credit score.

A large credit limit, however, does not imply that you have permission to spend above your means. It simply allows you a little more latitude if you need to make a large-ticket purchase quickly, while simultaneously protecting your credit score and increasing your eligibility to apply for premium credit card versions in the future.

  • Fees charged on an annual basis

While there are many credit cards with no annual fee on the market, some of them are merely basic versions with limited features. So, if you’re looking for a premium credit card with more benefits, seek one with an annual cost that doesn’t break the bank and, more significantly, when the usage benefits outweigh the membership fees. Additionally, many annual fee-charging credit cards include annual spending targets; if your budget permits you to meet those criteria, your annual charge will be eliminated upon renewal.

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