Does this sound like a familiar situation? You are very keen to get a new credit card, are bombarded by an array of very tempting offers being advertised, but end up back at Square 1 as confused as ever because you simply don’t know which one would be the right one for you. The market is flooded with a number of credit cards and it can quite overwhelming to try and compare the various features and benefits. There are a multitude of credit cards available on the market today to suit the lifestyle needs of the large customer base and there are several suitable options available - if you can identify them.
There are several resources today in the internet, which could be a boon but can also lead to a complete mind freeze! This article would help explore how you can compare credit cards and what to look for while comparing credit cards.
What to consider
Hunt for the lowest interest rates: Of course, the interest rate offered to you on your card depends on a variety of individual factors like your credit score or your relationship with the bank. But it still pays off to do research on which cards offer the lowest interest rates. Don’t be fooled by 0% offers, as they are usually promotional offers and you will find yourself paying high interest once the promotional period is over.
Fees and charges matter: Don’t just go for a card that has zero joining fees. Dig deep as to why it’s free. These kinds of card sometimes come with a high interest rate. Be sure to check and compare.
Annual fees aren't all bad: Credit cards with an exorbitant annual fee are generally the ones that offer super premium advantages, which outweigh the fee. With many the cards, the annual fees get waived when your annual spends exceed a certain limit. Hence, cards with an annual fee can work out if you are a big spender.
Cashback/Reward Points/Miles: Carefully consider your lifestyle habits and decide whether you want to go for one which offers cashback, or Rewards Points or air miles. Different rewards programs offer different perks—choose one that suits your lifestyle needs.
Comb through your mailbox for the best offers: If you are not a first time credit card applicant, chances are you might have lots of offers waiting for you either by post or in your email inbox. Deals in your mailbox may offer better terms than general offers those available to a wider set of applicants online. Banks usually give better deals to their existing customers, and sometimes, you can even get upgraded to a super-premium card. Do make a note of the terms and conditions—an upgrade could entail sacrificing some or all of your hard earned reward points.
Here are some practical tips to keep in mind when considering a new credit card:
Don't forget about your credit score. Having a good credit score is vital in order to land the best interest offer for your credit card. If your credit score is less than 750, then you are unlikely to get the best (lowest) interest rates. If your credit score is poor, you run the risk of being rejected and damaging your score further.
Don’t make multiple applications for credit cards – it signifies that you are in need of credit from various sources and will decrease your credit score. Take your time to identify which card you qualify for and suits your requirements and apply for only that one.
Don't use just one online comparison site that lists out the various cards. When you are doing your research online, there are some sites that only list the cards that advertise with them. This means only a select number of cards will be featured, which is a huge negative. Instead, use multiple resources to do your research.
Do focus on improving your credit score. Obtain a copy of your credit report (you can do this online) and check for any errors like wrong spellings or contact details or incorrect loan status. File a dispute and get it corrected immediately.
Do pay off your dues consistently on time. You will see your credit score rise.
Comparing the best credit card and choosing one can be tough, given the number of options available. If you think you need help with choosing the right credit card suited to your particular credit profile and needs, then CreditMantri can guide you through the entire process and match you with the best offer that you are qualified for.