The pandemic has hit all of us and the economy alike. In the face of salary cuts, loss of jobs, medical requirements, professionals, employed persons, business owners, etc., are faced with a difficult decision.
Should we opt for a card or should we arrange for cash from our savings and investments? A credit card seems to be a dependable option.
That being said, you must consider certain essential factors if you are a new and first time user of a credit card.
- Understand your needs
Do not get caught up in a cycle of debt. You must understand and evaluate your cash flows, expenses and lay out how and when would you use a card for. Blindly swiping a card, only because it’s tempting and easy is probably not the best way
- The fee component
Banks and financial intuitions have a variety of cards to meet your needs. However, be aware of what the card will cost you annually. Some cards come with an annual fee whereas others are free.
Top-end and premier cards are not offered to everyone. They would depend on your creditworthiness, income earned, etc. Discuss with your creditor about the card you wish to apply for and check if you meet the criteria
- Interest Rates
Every card would have certain interests associated in case of cash withdrawal or delayed payments. Have a transparent conversation with your creditor in case you believe you might need to avail of this option
Credit card companies value spends. There is a wide range of rewards you might earn based on your bonus points. Bonus points are points you would earn with every spending. Rewards may be in cash or kind.
Offers on every credit card vary. Some have offers on dining whereas others have offers on your travel. Decide a card that has an offer based on your needs
- Customer Service
Often this is ignored but is one of the most important factors while choosing a card. Prefer a creditor who values your relationship and has impeccable customer service
Some cards are not accepted everywhere. They have limited merchants listed with them. Hence, opt for a card that is accepted everywhere
- Credit Limits
Though limits are based on your financial worthiness, yet some cards offer a higher limit. Choose a card that is willing to give you a higher credit so that all your needs are covered
- Billing cycle
Understand the credit card billing cycle. This should be in line with your cash flows. You must be able to align your cash flows with the billing cycle of the card you opt for