How to choose the best Credit Card online

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A Credit card has become the new inevitable reality; it is the most common way to access the credit. It is a rectangular-shaped plastic card provided by the banks and financial institutions which allows a borrower to take credit for any use under the pre-approved limits. The two prominent credit cards benefit will enable the option of credit anytime and charges almost nothing if the payment is made before the deadline.

However, the use of credit cards must not be taken for granted. An individual needs to be shrewd while purchasing and using a credit card; he must maintain a lower credit utilization ratio and must pay back the outstanding amount before the deadline. Smart and cautious use of Credit cards will positively impact the CIBIL score and will not deter the creditworthiness of the user. 

Now that we have understood why it is crucial to choose the best credit cards let us dive into what factors should be considered while looking for the best credit card.

  1. Credit card limit 

Credit card limit refers to the highest credit which an individual can avail monthly. The credit limit must not be too high as most people due to higher credit limits end up with too much credit and eventually stuck in the quagmire of paying interest and principal amount. On the other side, the credit card limit should not be too low as it will then belie the whole purpose of the credit cards and will lead to a high credit utilization ratio. The ideal case should be understanding your finances, assessing your need and then planning on the credit cards limits. Determining the credit limits based on whims is a crime, worth avoiding.

2.Annual Percentage Rate

Annual percentage rate refers to the rate at which individuals have to pay back the amount which is not paid before the deadline. Individuals should always try to pay back the amount before the deadline, but there are still some cases where it becomes inevitable to pay within the timeframe. There comes the role of APR; lower APR will help the user to do away with paying a higher rate of interest.

3.The cost of maintaining a credit card

A credit card is like a machine which, when used smartly, is of great importance, but a few mistakes may lead to poor results. Credit cards’ easy access makes it a viable option, but regularly missing payment deadlines may lead to terrible consequences in the form of interest payments. 

Credit cards also have an annual cost, and individuals must look for credit cards with a lower yearly price.

4. Rewards

Credit cards also offer rewards to serve its customers. Rewards can be in the form of earning points on spending or free travel cost etc. Individuals must look for credit cards that offer better rewards. Though rewards must not be the sole reason for selecting a credit card. On should not be caught by advertised offers and must remember ‘All that glitters is not gold’.

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