In the past, our earlier generations lived in a savings oriented society. We live in a credit-oriented society. Now, you need to buy a house, a car, or go on a vacation; you have credit products for all these activities. Banks like to look at your credit history before giving you credit. Is it not like a Catch-22 situation? You need to have a good credit record to get credit. How will you develop a credit history without anybody offering your loan in the first place? The Credit Card can come to your rescue under such circumstances. Let us look at three simple tips to get a perfect card.
1. Choose your card to suit your priorities
Banks offer a variety of cards. Make a list of your priorities. If you’re a frequent traveller and love to travel by a particular airline like Jet Airways, you can opt for co-branded Credit Cards. These cards earn reward points for you when you use them for booking your flight tickets through partner airlines. You can also get complimentary air tickets when you choose these cards.
Similarly, if you are a shopping enthusiast, the Fbb SBI STYLEUP Card should suit your preferences. You can use this card at the Big Bazaar stores and get attractive discounts. Similarly, you have dining credit cards that give reward points on dining at select places during the weekends.
Persons already having Credit Card debts can shop for cards that allow balance transfer at low-interest rates. Some cards come with 0% Annual Percentage Rate (APR) for the first 12 months. Such a card will enable you to save money while eliminating your card debt.
When you Apply for a Credit Card Online, you should get your priorities right. Choosing a card that suits your preferences is the right way to go about it.
2. Learn to read between the lines
People have the habit of skipping through the terms and conditions of any Credit Card contract. They accept the terms without going through it. We agree that the conditions are usually the same for all kinds of Credit Cards. Nevertheless, one should read the requirements to understand the subtler aspects of the Credit Card concept.
A Credit Card can look overtly attractive, but you will find that it has an annual renewal fee. If you are a person that uses the Credit Cards sparingly, opting for such a card is not advisable. It makes sense if you use the card and earn enough cashback or reward points to take care of the annual renewal fee.
Reading the fine print is crucial in the co-branded cards as compared to the standard Credit Cards. You travel Credit Card can have a lot of blackout dates implying that you will not be able to get the reward points on such days. Similarly, your shopping card can come with specific onerous clauses.
Reading the terms and conditions is also essential to know the benefits of your card. It can have travel insurance, purchase protection clauses, or free extended warranties. You will be aware of these benefits only if you read the terms and provisions. When you apply for a Credit Card, do not skip the terms and conditions.
3. A small start is always an excellent way to build up a credit history
You aim to build up a credit history. The key is to keep your Credit Card utilisation at low levels. The thumb rule is that your expenses on the card should not exceed 10% of the limit. It allows you to make your payments on time without any default. Set up an SMS alert in case you spend more than your threshold level. It is a good idea to remind you of your commitment.
Banks usually give you small limits in the initial stages. They would like you to understand the concept of Credit Cards and develop your credit history. A lower limit allows you to be in control of your expenses and payments as well.
Remember to make the payment on time every month. As you build a sound credit history, you clear your way towards acquiring higher limits or more significant loans like Home Loans and mortgage loans.
These are simple but practical tips that help you choose the perfect card. Follow them diligently and get the right card for you.
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 60+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.
Talk to our Loan Specialists toll-free at 1800 103 4004 to know more about our products and offers.