What to Consider when Applying for a Credit Card?

Credit Cards are a great way to add money to your pocket whenever you need. Moreover, you can pay your bills and buy anything you want through a credit card. A credit card makes your life a way easier than what it would have been without it. The money used can be paid to your credit card provider in the form of monthly instalments along with the interest, same as that of loans. However, the best part about a credit card is when you repay the money within a month there is no interest charged on that. Apart from this facility, there is one more advantage which you get with a credit card, which is when you don’t have money to pay the entire amount or your monthly instalments you can pay a minimum amount towards your credit card bill each month.

However, where there is a brighter side there is a darker side too, well for a credit card brighter side is more as compared the darker side. 

Though credit cards are very beneficial and have lots of plus points, the only thing which makes you think twice about a credit card is its interest rate. The interest rate charged for a credit card is usually high and it might get difficult for one to get out of a credit card debt as it is a kind of debt trap when not used wisely.

Top 5 Things to Check before Applying for a Credit Card

Interest Rate

Interest is the most important thing to consider before opting for a credit card. 

It decides the cost of your borrowing, hence accordingly you can decide which one to opt for. Generally, credit cards come at a higher interest rate which is more than any loan. So, when opting for a credit card it becomes an important criterion to compare the interest rate for your credit card among all the credit card providers in the market. Some providers also provide offers such as 0 interest rate and for a few months or no interest EMI for the few months.

Annual Charges

These are the charges which a lender impose on the credit card holder against their credit card. No matter whether you are using your credit card or not, with few lenders, it is compulsory to pay this charge once in a year against their service, doesn’t matter if you avail it or not. 

There are also some lenders who do not charge such kind of charge. So, while looking for your credit card try to get one with which no annual charge is associated. Doing this makes you worry free and relaxed a bit.

Credit Limit

Credit Limit is the limit within which one can use money. Suppose the credit limit of your credit card is ₹ 1 lakh this means you can use your credit card for paying bills or purchasing thing only up to 1 lakh. You can use it in even small breakups or once your credit card provider has nothing to do with it. 

So, when you get a new credit card this becomes an important criterion to decide the credit limit for your credit card. It is always suggested not to go with a high credit limit credit card. However one should always decide their credit limit according to their requirement. 

Check for Rewards

Rewards are the new offers launched by credit card companies to attract more number of users. The reward points offered are really attractive and are in favor of users only. Reward points offered are on the basis of uses of the card and on money spent. 

The reward point offered can be redeemed on the next use hence decreasing your initial cost of borrowing. Different credit card companies offer reward points on different uses, some offer it on shopping while some on traveling & dining. So, while selecting your credit card it is important to consider your uses and then the reward points offered.

Other Fees

Before applying for any credit card check for all the extra fees that the credit card company is going to charge you. 

These kinds of fees include late payment fees, penalties, balance transfer fees, cash advance fees, etc. Apart from all these knowing all the terms and conditions involved before going with a particular one is very important. This not only makes you aware of the consequences but also protects you from the future problems.

Knowing the late payment charges is most important as in future situation may come when you don’t have enough money to pay your credit card bill, in that case, you should know the outcomes from before so that you can avoid such situation.

Credit cards are very helpful and we will suggest you to at least have one credit card to be financially safe and secure in this present uncertain world. However, while Applying for a credit card one should always take care of the points mentioned above and in addition, it should always be used carefully and wisely.