Choosing the Right Credit Card
November 20th, 2008 by admin Leave a reply »As the Credit Card issuing companies offer a variety of cards with various features, it is essential for the Credit Card applicant to choose the right Card that would suit his needs. The applicant has to consider a number of factors such as eligibility criteria, Interest rate, Interest free period, Balance transfer facility, Cash Advance Fee, Interest rate for Cash Advances, special offers etc. Before signing the documents, the applicant should make sure that he has read and understood the Terms & Conditions related to the specific Credit Card he intends to avail. If you apply for a Credit Card for which you aren’t eligible (age or income criteria) then your application will be rejected. Hence it is advisable to take some time to compare different credit cards and take a wise decision.
A Credit Card can be extremely useful in various ways, if used wisely. Say for instance you could avoid carrying cash, make online purchases, place phone orders and withdraw money at the time of financial crisis. On the other side if you don’t pay your bills in time or default the payments, you will have to face bitter consequences. The following information would help you to choose the right Credit Card for you.
Cash Advance Facility
Cash Advance means withdrawing money through your Credit Card. It offers the benefit of liquidity during the time of needs. The Credit Card issuer will allot a cash withdrawal limit based on your overall credit limit. The Card issuer will charge a fee called “Cash Advance Fee” on every withdrawal and would also charge an Interest rate for the money withdrawn until you pay the next bill.
Secured
The Secured credit cards are pretty easy to obtain. You have to put up a security deposit to get the card and will most likely start off with a low limit. For example most Capital One Secure mastercards start off around $250 but after using the card for about a year they may bump you up to $750 / $1500 or even higher. This is a great option if you have bad credit or no credit at all.
APR (Annual Percentage Rate)
Annual Percentage Rate is the yearly Interest rate that would be charged by the Card issuer, if you make part payments on your Bill. Most often Credit card Interest Rate is charged every month based on the average daily balance.
Balance Transfer Facility
This option lets you to transfer outstanding balances from your other credit card to the card you are applying. The benefits include low interest rate and easy monthly installments.
Reward Points
Almost all the Credit Cards offer this facility through which you gain points based on your spending pattern. Accumulated points can then be redeemed to buy gifts etc.
Add-on Card
Add on Card is a great way to present a Credit Card to your family members. The add-on card’s credit limit is based on your (primary card) credit limit. Moreover you are liable for all expenses made through the Add-on card.
Travel Credit Cards (Air Miles)
Travel cards are suitable for frequent travelers which offer reward points on travel, concession on Air tickets, lost luggage assistance and travel insurance. The features may depend based on the card selected by you.
Business Credit Cards
Business Credit Cards carry a lot of advantages to Businessmen. It helps to maintain a separate account for your Business expenditures, provides high reward points and high spending limits.
Student Credit Cards
Many Credit Card Issuers offer specialized cards for College Students. It helps them to build a good credit history and learn the credit management skills.
Gasoline Cards
This type of cards helps to fill up gasoline and to track your monthly fuel expenses. It also comes with cash withdrawal facility. It offers reward points/ rebates based on your fuel purchases. AMEX has some of the more popular Gas Points credit cards.
EMI Cards
EMI Credit Cards offer the facility of making purchases and paying the dues in easy monthly installments. It usually comes with a low interest rate and convenient repayment period.