In today’s world, the use of credit cards has become an integral part of our lives. Whether it is for making everyday purchases or for paying bills, credit cards have made our lives more convenient and hassle-free. However, with so many options available, it can be quite overwhelming to choose the best credit card in India that suits your financial needs. But don’t worry, we are here to help you understand why choosing the most beneficial credit card in India is crucial for achieving your financial goals.
Basics of Credit Cards
Firstly, let us understand the basics of credit cards. A credit card is a payment tool that enables you to borrow funds from the card issuer to make purchases or to pay bills. You will have to repay the borrowed amount to the issuer within a stipulated time, failing which you will be charged a high-interest rate on the outstanding amount. This interest rate can range anywhere from 10% to 45%, depending on the type of credit card and the issuer.
Benefits of Using Credit Cards
Now that we have understood the basics let’s discuss the benefits of using credit cards. First and foremost, the use of credit card helps you build a credit score. Your credit score is a three-digit number that reflects your creditworthiness. Having a good credit score is crucial for getting a loan, buying a house, or even renting a property. Timely payments of your credit card bills boost your credit score, and thus it is essential to choose a card that suits your financial situation.
The second benefit of using credit cards is the rewards and cashback offered on purchases. Many issuers offer reward points and cashback on specific purchases, which can later be redeemed for products or services. Choosing a credit card that offers the most benefits on your regular spending can help you save money in the long run. Some of the popular rewards offered on credit cards include cashback on fuel purchases, dining, air travel, and online shopping, among others.
Another significant advantage of using credit cards is the interest-free period offered by the issuer. The interest-free period is the time during which you can repay the borrowed amount without any interest charges. This period usually ranges from 20-50 days, depending on the issuer. It is important to note that interest-free periods are only applicable if you make timely digital payment of the outstanding balance.
How to Choose the Most Beneficial Credit Card in India
Now that we have discussed the benefits of credit cards, let’s move on to how to choose the most beneficial credit card in India. The first and foremost criteria to look for while choosing a credit card is the annual fee and other charges associated with it. The annual fee and other charges vary significantly from issuer to issuer, and it is important to choose a card that offers the best value for money.
Before choosing a credit card, it is essential to evaluate your spending habits. Make a list of the most frequent expenses you make through your credit card, such as fuel purchases, online shopping, dining, air travel, etc. Once you have listed your spending habits, choose a credit card that offers the most benefits on those purchases. For example, if you frequently shop online, consider choosing a credit card that offers cashback or reward points on online shopping.
Another factor to consider is the credit limit offered by the issuer. The credit limit is the maximum amount you can borrow through your credit card. It is important to choose a credit card that offers a credit limit suitable for your financial needs.
The next factor to look for is the interest rate charged on the outstanding balance. As mentioned earlier, the interest rate can range from 10% to 45%, and it is always advisable to choose a credit card with a lower interest rate. This can help you save a considerable amount of money in the long run, especially if you carry a balance on your credit card.
If you travel frequently, consider choosing a credit card that offers travel benefits such as airport lounge access, air miles, and hotel discounts. Many issuers offer such benefits on their credit cards, and it can help you save money on your travel expenses.
Lastly, it is important to read all the terms and conditions associated with the credit card before applying for it. Make sure you understand the fees, charges, and other terms associated with the credit card, as it will help you make an informed decision.
Conclusion
To sum it up, choosing the most beneficial credit card in India is crucial for achieving your financial goals. Whether it is for building a credit score, earning rewards and cashback, or enjoying interest-free periods, credit cards have numerous benefits. However, it is important to choose a credit card that is suitable for your financial situation and offers the best value for money. Evaluate your spending habits, consider the fees and charges, and read the terms and conditions before choosing a credit card. Remember, using your credit card wisely can help you achieve your financial goals and lead a stress-free life.
