With scores of credit card companies vying for attention in one of the largest consumer markets in the world, choosing a card suitable for your needs can be daunting. From SBI to HDFC and Citibank to HSBC, each card issuer has its very own list of benefits and value back offers. Knowledgeable navigation is therefore a perplexing journey.
Look at RBI data: As of March 2021, India with a population of 1.3 billion had 62 million cards in force i.e., five cards per 100 persons. This accounts for very low penetration in India making the market fiercely competitive when it comes to new customer acquisition and the choices for a consumer difficult.
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With a fair credit score starting at more than 650 and a regular monthly income, you can conveniently qualify for an all purpose entry level credit card with your preferred bank. Premium features do come with additional costs. Let’s understand how you can use a credit card wisely in seven steps.
1. Determine Spend Pattern
Before exploring credit card options for yourself, you must first understand that there is no ‘one size fits all.’ You cannot mimic the spending pattern of your best friend.
2. Match Spend Pattern With Plastic
Credit cards offer ease of purchase now and pay later. Put together regular expenses and aim for a credit card that serves the top three expense categories for you. For example, if your top expenses are shopping online and digital purchases e.g. food or movie tickets, your search narrows to a lifestyle and entertainment card that offers benefits like accelerated rewards for online shopping and value back offers on online bookings etc. Good picks could be SimplyCLICK SBI Card, HDFC MoneyBack Credit Card, RBL Bank Popcorn Card among others.
3. Assess Affordability
Annual Fees: Other than zero-fee cards, all credit cards have a non-refundable annual charge. You may find a premium card at zero joining fee, it is likely that there is an annual fee second year onwards. There could be a fee waiver on achieving spend milestones.
4. Examine Specific Personal Priority
Before taking a final call, however, it is recommended to look at some issuer specific benefits. These could be unique benefits that only a particular issuer offers to its customers.
5. Correct Usage
New users can commit errors in plastic usage, sometimes very costly.
6. Multiple Credit Cards
It is a common perception that credit cards lead to a debt trap. On the contrary you can better manage expenses with multiple credit cards.
7. Parenting Through Plastic
It is a universal aspiration for parents to desire the very best for their progeny. Whether they ripen as successful professionals, musicians or sportspersons, children will always be required to manage finances adroitly. And a credit card can be one of the first tools to impart financial lessons for future leaders.
