A credit card is essentially an unsecured loan. It provides you with access to a personal line of credit to purchase your favourite goods and services and pay for them later. There are so many variants of credit cards in the market. It may be tempting to sign up for any credit card that comes your way. But, not all cards are the right fit for you.

While banks try to woo their customers with maximum benefits and attractive offers, one should be wary of the fine prints associated with a credit card. If used correctly, credit cards may be a great financial instrument. However, many people make mistakes while choosing a credit card, and end up in debt or damaging their finances. 

Additional Reading: Best Credit Cards of May 2021: Top Offers & Rewards

So, you need to think carefully before choosing a credit card. In this post, we list the questions that will help you pick the right card that matches your lifestyle and usage. 

  1. Why am I getting a credit card? How will I use it? 

You definitely have to think about this aspect before applying for a credit card. Credit cards have different purposes; is it for your general household purposes? Are you going to use it mainly for fuel purchases? Are you a frequent flyer who is looking for a great reward program with an airline, hotel or online travel agent? Are you crazy about online shopping? Or is your main expense towards movies and entertainment? 

You need to narrow this down. Because, as mentioned earlier, there are so many different types of credit cards available in the market. Based on your spending pattern and spend categories, choose the one that best suits your needs. 

  1. What are the interest charges and other fees associated with the card?

A credit card is basically an unsecured loan. You don’t need any collateral or security to get a credit card. It is mainly offered to you based on your income and credit score. This obviously results in steep interest rates and a lot of other charges. 

There is a joining fee, annual fee, late fee, cash withdrawal fee, and so many more fees associated with a credit card. These charges are usually not fixed and depend on the amount you have utilized on your credit. So the more you use, the more are the charges. Having a clear idea of how much this credit card is costing you is essential while choosing a credit card. 

  1. What is the credit limit offered on the card? 

The credit limit is the primary benefit you are getting with a credit card. If this is not up to your requirement, there is no point in getting that specific credit card. Now, your credit limit depends on various factors like your age, income and credit score. If your credit card has a small credit limit, you won’t be able to make any big purchases. That wouldn’t help you at all. 

Additional Reading : Smart Ways to Get Higher Credit Limit on your Credit Card

Also, did you know that you can negotiate with your bank to get a higher credit limit? Yes, during the application process, they will inform you of the credit limit. If you feel that it is less, you can negotiate with the banker and get a higher credit limit, provided you have a good credit score and adequate income to justify the higher limit. 

  1. How good is the rewards programme of the card? 

Ah! What use is a credit card if it doesn’t come with a great rewards program? Every credit card has some kind of reward program. Some cards allow you to accumulate the points and redeem them for cool merchandise, while others offer cash back based on your spending. Whatever the case, customers want some kind of incentive for using the card. 

Check out the reward programs to see if they are beneficial for your intentions. For example, if you are a frequent flyer, a reward program that gives free air miles will be beneficial for you. Similarly, if you are a movie buff, a reward program that gives free popcorn and drinks with every ticket booking will blow you off. There are so many rewards for every credit card. So choose one that rewards you for doing what you love!

  1. What are the value adds and other additional benefits in the card?

Other than a rewards program, credit cards offer various other value adds and benefits to their customers. There is free life and accident insurance, free travel insurance, complimentary lounge access in selected airports, discounts in popular restaurants and malls, and so on. Check the additional offers on the credit card to help you find the right one that best fits your needs. Why let go of such amazing offers when they can save you a lot of money?

  1. Finally, ask yourself do you really need this card? 

A credit card is a convenience, no doubt. It gives you instant credit without the tedious documentation required for a loan. However, how many credit cards is too many? Having too many credit cards makes it difficult to manage them all. You might end up overspending and end up in a debt trap. 

So it is better to give thought to whether you really want that new credit card now. Instead of getting a new credit card, you can talk to your existing credit card company and ask them to improve your credit limit and add in some extra benefits like insurance or other discounts. Getting a new credit card will also result in a credit check, hurting your credit score. Then there is the joining fee and annual fee you have to bear. It would do you good to find out if the benefits of the new credit card outweigh the charges you have to bear. 


A credit card is a great financial tool when used prudently. The best practice is to utilize only what you can repay and to pay the entire bill. Make sure to make the best use of all the discounts and benefits offered on your credit card. Be aware of your billing cycle and payment date so that you don’t miss out on payments and incur interest charges. 


  1. What is the credit limit on my credit card?

The credit limit is the amount available for you to use on your credit card. Your credit limit is fixed based on your age, income credit score and few other parameters. This will be mentioned in the welcome letter you get with your credit card. 

  1. What is the minimum age to get a credit card?

Most banks issue credit cards to individuals who are 21 years and older. These days, many banks are offering credit cards for individuals who have completed 18 years too. 

  1. What is the billing cycle on my credit card? Where can I find it?

The billing cycle is the number of interest-free days available to repay the amount you used on your credit card. Your credit card statement is generated at the end of every 30 days and you get another 15 days max to repay the amount. Beyond this period, your bill amount will start accruing interest. The date will be mentioned in the welcome letter you get with your credit card.

  1. Are there credit cards without any annual fees or joining fees?

Yes, there are many credit cards in the market that do not charge a joining fee or annual fees. Check with your banker on this aspect before applying for the card. 

  1. Is it better to choose a credit card with a rewards program or one with cashback?

This solely depends on your usage. If you are a person who loves to shop, a rewards program will be good. You get to redeem your points for amazing merchandise. If you are not that much into shopping or buying stuff, you can go for the cashback card. You could get some great cashback deals for high-value purchases.