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Most users have a very basic understanding of credit cards and how they work. To most users, these cards simply represent a line of credit, albeit one that attracts interest. This however, isn’t entirely true. While all credit cards allow you to make instant purchases without needing to make simultaneous payments, there are differences in the repayment structure, interest, fees, and also in benefits offered.
There is a wide range of choice when it comes to credit cards and many banks also offer repayment options with a specific interest-free period. It is important to keep your expectations in check while researching the different options to find the perfect card that meets your requirements. To find a card that suits your needs, it is recommended that you ask yourself a few questions.
How often will the card be used?
Do you believe that ‘cash is king’ or will you be using the card for all your requirements, such as fuel, groceries, bill payments, and everything else. No matter what your usage, the best credit cards will most likely be those that require no annual fees. However, if you plan to use the card for all your purchases, you can convert these to vouchers or other offers with a rewards program.
How much balance will be repaid every month?
It is absolutely essential for you to be very realistic about this consideration when you apply for a credit card. If the answer is the minimum due amount, you should find a card with low-interest rates to save money. On the other hand, if you are going to pay the bill in full each month, the rate of interest will not be too much of a concern and you can opt for a card with other benefits and features. This consideration is even more crucial than the presence of an annual fee.
Do you have any outstanding amounts on other cards?
If you already have a huge outstanding on your card, you should consider the type of credit cards known as balance transfer cards. Very often, these cards give you the option to convert the outstanding to equated monthly installments that reduce the carrying cost on the owed amount.
However, while opting for such a card, it is important for users to be aware of the rates. Card issuers may provide the lower interest rate only on new purchases made, which does not address the existing outstanding balance issue. Conversely, the low balance transfer rate may not be applicable to new purchases.
Are you a frequent traveler?
For frequent travelers, it makes sense to look for cards that offer travel rewards. These cards award reward points on your travel and airline expenses, which can be redeemed for free air miles or stays at participating hotels. However, do not be influenced by the sign-up bonus, but be more attentive towards the long-term perks and rates that are more valuable to you.
A secured credit card, when chosen and used responsibly has several benefits. All banks including Kotak Bank offer different kinds of cards to suit the varied needs of their customers. A few of their offerings are listed below:
Shopping – Urbane Gold, , Silk Inspire (Specially designed for women), and Essentia Platinum
Lifestyle – League Platinum, Wealth Management Infinite, Privy League Signature, and Royale Signature
Dining/Entertainment – PVR Platinum, PVR Gold, and Delight Platinum
Non Resident Indians – NRI Royale Signature
Just as you would hunt around for the best bargain when shopping for major purchases, the same care should be taken when applying for a credit card. If you believe that you can use a credit card in a responsible manner that benefits and helps you save money, you should consider signing up for one of these cards at the earliest.
Tejas Kunder is an independent blogger and writing has been his passion for a long time. A journalism grad, he loves exploring the world of sports, health, lifestyle and travel. When he’s not writing, he’s out on his bike discovering new places, apart from that he loves listening to music and catching up on the latest flick.
Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.