What you should know to choose the right Credit Card?

Credit cards have simplified life for the urban consumers. Whether you are looking to make a large purchase that can be paid back in instalments, planning a travel budget in foreign currency, or seeking funds in an emergency, credit cards can offer users great comfort and convenience. 

Various credit card benefits and perks have made credit cards the preferred mode of transacting for millions of users across the globe. However, choosing the right credit card can be an overwhelming task, given the wide array of options available. There are cashback credit cards, co-branded cards, shopping- or travel-specific cards, luxury benefit cards, etc. 

Here’s everything you need to know before you choose one of the best credit cards for yourself.

Different types of Credit Cards

Before you apply for a new credit card, it is important to evaluate your personal income and expenses, repayment capacity, and how a particular card fits in with your spending habits to maximise the benefits available. Here is a list of popular card options that you can consider based on your spending needs and financial goals. 

Rewards Credit Card

These cards offer accelerated reward benefits, especially for spends across certain categories such as groceries, electronics, lifestyle, etc. The rewards may be in the form of discounts on cashbacks or bonus rewards that you can redeem in cash value for future purchases. Every now and then, the card provider may offer additional incentives for spending beyond a specified threshold or for using the card at a certain merchant establishment.

Reward cards are a great option if you have to pay for frequent family or personal expenses. The reward benefits allow you to make small savings that add up over time and help you consolidate and manage your expenditure.

Co-branded Credit Cards

Co-branded cards work on a principle similar to rewards credit cards. However, the benefits are tied to a specific brand or service provider whose logo is prominently displayed on the card. Brand partnerships range from retail stores and e-commerce platforms to electronic stores, airlines, and even coffee shops! You stand to gain from discounts, preferential pricing, freebies, and more.

You should consider a co-branded card only if you regularly spend a good amount on specific goods and services with the associated brand. Unless you’re buying gadgets frequently or having two coffees a day, the co-branded card may not add a lot of value. In fact, with respect to other key features such as credit limit, interest rates, and generic reward programs, such cards tend to lag behind.

Travel Credit Cards

If you live to travel, some credit cards can suit your wallet and wanderlust. Travel credit card benefits and features include air miles, discount on airfare, low mark-up on foreign currency transactions, priority check-in, allowance for extra baggage, complimentary access to airport lounges, discount on hotel bookings, free travel and accident insurance, etc.

If travel is not a priority, there is no utility for the value-added benefits. When used appropriately, however, a travel card can allow you to make considerable savings, and its features and advantages will help make your travel more comfortable and memorable. 

Low-interest Credit Cards

Credit cards generally charge higher interest on EMIs compared to other loan products. Low-interest credit cards, as the name suggests, have a lower annual percentage rate (APR) or yearly interest charge on deferred payments. Card providers offer a wide range of interest rates depending on the applicant’s eligibility, credit score, and loan/EMI option tenure. 

These credit cards are useful for individuals looking to consolidate and pay off accumulated debt (balance transfer) at lower interest rates or expect to make multiple high-value transactions in the future. However, low-interest cards may not offer the rewards and perks that other cards do.

Business Credit Cards

Freelancers, entrepreneurs, and small business operators could consider getting a credit card designed for business use. These offer a higher credit limit and favourable repayment terms that can help you maximise cash flow and streamline operational expenses. They also come with in-built accounting and expense management tools that you can easily integrate with any bookkeeping software.

Business cards also come loaded with features and benefits such as more reward points, air mile conversions, discounts on travel, hotel, and dining, fuel surcharge waiver, and more.

In addition to the above, a few other types of credit cards are available in the market, such as cashback credit cards, student credit cards, shopping credit cards, etc.

Conclusion

In addition to delivering savings and benefits, credit cards also allow you to build and manage your credit score easily. This makes them an invaluable financial tool. But choosing the best credit card for your needs is a decision that should be taken after careful consideration and research.

Simplify your search and choose from a range of credit cards from IDFC FIRST Bank. The FIRST Classic Credit Card delivers exceptional value and an industry-best rewards program with up to 10x reward points, making it the definitive card for family and household spending. The FIRST Millennia Credit Card is perfect for your dining, shopping, and entertainment needs. Avail of all-year discounts at 300+ merchants, health and wellness outlets, discounts on movie tickets, dining benefits at 1500+ restaurants, and more. The FIRST Wealth Credit Card offers unmatched lifestyle benefits – complimentary movie tickets, all-year-round discounts on shopping, access to airport lounges, complimentary spa visits, free golf rounds, etc. With FIRST Select Credit Card you get gift voucher, cashback and a host of other benefits to suit your lifestyle like movie tickets and access to domestic airport lounges.

IDFC FIRST Bank also offers many co-branded cards to choose from.

All IDFC FIRST Bank credit cards come with free lifetime validity and unlimited reward points that never expire! With unparalleled benefits, low-interest rates, and plenty of savings, IDFC FIRST Bank credit cards should be the ultimate choice for every smart spender.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.