How To Choose The Best Credit Card Based On Your Lifestyle

With digitization setting in, it does not make sense to carry a stack of cash to make repetitive or high-value purchases. Whether you are a frequent flyer, a movie buff, a shopaholic or one who often loves to dine out or go on road trips, now there is a credit card in India, designed for every individual’s lifestyle. These are called lifestyle credit cards. Apart from saving space in your wallet, there are other noteworthy benefits of owning a credit card.

• Rewards for spending – get paid for shopping! Literally, you can earn rewards on spending by way of reward points, cash back, vouchers, discounts, freebies, etc. This wouldn’t be the case if you’d make cash purchases/payments.
• Improve your creditworthiness – using a credit card is a very smart way to avail a loan easily in the future. If you pay off your credit card bills religiously every month before the due date, automatically your credit score improves and it becomes easier for banks to trust you and extend a loan to you. So if you aspire to buy a vehicle, house, appliances, etc., own a credit card first and start building your credit rating.
• Option to purchase now but pay later – although only for a month, but you still can defer your actual payment until you get your salary.

For anything and everything, today, you are overwhelmed and spoilt for choice. This includes shopping for a credit card. Let us now look at factors that you must consider before choosing the perfect credit card for yourself –

1. Your monthly income –

This is perhaps the most important factor to look at before zeroing down on a particular credit card. Possessing a credit card might increase your monthly expenditure considerably because of its sheer ease of usage. Hence you have to be very prudent and opt for one which you will definitely be able to afford.

2. Your lifestyle pending pattern –

Assess your lifestyle habits and judge what you would like to use your credit card majorly for. Broad categories of credit cards are as follows –

1. Fuel credit cards – this one is for those who frequently go on road trips whether official or personal. A significant amount of your card spend will be recurring petrol or diesel expenses and hence these credit cards which will have tie-ups with the major energy companies like HPCL, IOC, BPCL etc., will offer things like fuel surcharge waiver and extra points on payment by credit card which can be used up later at any gas station.
2. Frequent flyers credit cards – aimed at professionals or business owners who tend to travel by air frequently, these credit cards are offered with or without any airline association. These credit card holders earn miles on every transaction that they make on buying air tickets. These miles are just like reward points which can later be used up for buying an air ticket. Other offers like access to airport lounges, discounts on hotel bookings, car rentals, shopping at the airport, etc. are also part of few frequent flyer credit cards.
3. Entertainment credit cards – most of the credit card users belong to this category. These cards offer various discounts and reward points on dining, movie tickets, online and retail shopping, amusement parks, etc. Reward points once accumulated, can then be redeemed for making credit card payments in some cases or in other cases to buy vouchers or articles that would be listed on the credit card website.
4. Retail and grocery shopping credit cards – these are basic credit cards targeted at the mid-income segment who aren’t much into entertainment and would like to use the credit card only for their monthly grocery or household needs. These credit cards tied up with major retail outlets and will have offers like cash back, reward points and instant discounts.

 Interest rates, fees, and charges –

Last but obviously not the least, the charges that you incur in having this plastic in your wallet matters the most because, it has the power to nullify all your rewards and benefits, if not chosen wisely. It is imperative that you clear your credit card bill religiously every month and before the due date in order to escape the skyrocketing interest rates that average around 35% across all the major banks! Other fees and charges like joining fee, annual fee, late payment charges, over limit charges, card replacement charges, etc. also must be looked into before deciding on a credit card. For most banks, these charges are uniform and range between Rs. 50 to Rs. 750 or 1% – 2.5% of the amount, depending on the card type.

There are various online portals that you can use to compare credit cards online and subsequently decide on which one will suit you the best.

Ultimately, a credit card should speak about yourself and reflect your personality. Make it your best friend and never let yourself splurge, more than you can afford.