Checklist For What To Look For While Choosing A Credit Card

A credit card is an important financial tool in today’s world. With the majority of retail businesses going cashless, a credit card comes in handy when you want to purchase something. 

There are numerous cards available, each with its own set of features and benefits. It’s similar to shopping for your next SUV or a gaming laptop. It necessitates careful consideration of numerous brands, features, and costs. 

Once you start earning money, getting a credit card seems like the most mature thing to do. Though a credit card has many advantages, if not used carefully, it can quickly drown you in debt. When it comes to credit card payments, one must be extremely disciplined. Knowing all of the terms and conditions of your credit card will allow you to make the best use of it.

In this guide, we give you a checklist to help you find the best credit card that fits your lifestyle, income and budget. 

You might be interested in Best Premium Credit Cards For 2021

What is a credit card? What are its important features?

A credit card is a form of credit that allows you to borrow money from a bank under certain conditions. You can use a credit card to pay for purchases at merchant establishments as well as online purchases. During an emergency, you can also withdraw cash from an ATM.

  • A credit card has a set credit limit up to which you can spend each month. The limit is adjusted as you repay the money. If you do not repay the entire bill amount, you will be charged interest on the amount that remains unpaid.
  • As a beginner, you may not be able to obtain a premium credit card with a high limit from your banker. You will most likely receive a basic credit card with the majority of features.
  • You will be upgraded to better cards with superior features over time, based on your spending habits and repayment history. 

The thing is, every bank and credit card company has several card variants that can get confusing. Most banks offer an array of travel cards, entertainment cards, shopping rewards cards and more. 

How does one navigate through these numerous choices to pick the best card that suits them? We are here to help you with that. We have listed the top points, you can refer to while shopping around for your credit card.

1. Annual Percentage Rate (APR)

A credit card is essentially a monthly loan. You borrow money from a banker and pay it back the following month. If you do not repay, you will be charged interest. Credit cards have some of the highest interest rates available. This is due to the fact that they are an unsecured loan. 

The best credit cards on the market have annual percentage rates (APRs) ranging from 30% to 40%. This interest rate is determined by factors such as your income, age, credit score, and a few others. Pay close attention to this key point and decline a credit card with a very high APR.

2. Rewards Program

One of the best features of any credit card is the rewards program. Evaluate the card’s rewards program. A good indicator is the number of points you earn for every Rs.100 spent. The more points you earn, the more rewards you will receive. 

Check for cashback and discounts at brand partners so you can shop at their locations. It is also a good idea to apply for brand-linked credit cards, such as fuel cards, travel cards, student cards, or shopping cards, based on your shopping habits, so that you can get the most out of your money.

3. Revolving Credit Days

Credit cards provide ‘Revolving Credit,’ which means you have 45 – 60 days to repay the money you used on your credit card. Once you’ve made the payment, you’ll be able to use the credit again. Typically, you have a few days prior to the billing date and up until the bill due date to repay the entire amount without interest. There is also a minimum amount payable to avoid any additional interest charges on the borrowed money.

4. Annual Fee

As a marketing strategy to attract new customers, banks typically offer basic credit cards to beginners with no annual fee. However, if you are a few years old and want to upgrade your cards, you may have to pay an annual fee on your credit card. 

Annual fees range between Rs.500 and Rs.5000 per year, depending on the credit card’s features. Examine the credit card’s features carefully to determine whether the annual fee is worthwhile. Nowadays, card companies will waive the annual fee for subsequent years if you spend a certain amount during the year. Learn about it as well so that you can qualify for annual fee waivers.

5. Other Fees and Charges

Credit cards have a variety of other charges and fees such as late payment fees, cash withdrawal fees, over-limit fees, and so on. These fees will be detailed in the prospectus that comes with the card. Make a note of these charges so that you can avoid them by properly maintaining your card.

6. Credit Limit

Your credit limit is determined by your earnings. This is the maximum amount you can spend on your card at one time. As previously stated, this is a revolving credit limit. It is replenished on a regular basis as you make payments. Keep this limit in mind and make sure you don’t go over it. Otherwise, you will be charged for exceeding the limit, which is quite high. According to experts, your credit utilization ratio should be 30% or less of your total credit limit. This allows you to comfortably pay off your credit card bill.

Also Read: Is 0 A Good Credit Utilization Ratio


Your credit card should suit your lifestyle; it should reward you for things you regularly use your credit card for. The features and benefits of your card should be customized to your spending pattern so that you can extract maximum advantage out of the card. There are a lot of cards in the market so you should spend some time shopping around and see which suits you best. 

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