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 Your very own Credit Card shopping checklist

Your very own Credit Card shopping checklist

When going ahead with shopping for the ideal credit card, there are certain vital points you need to focus on before you go ahead with getting one. The ironic things about credit card is that, although you don’t need to pay right away, you need to pay much more at a later point. However, this can be avoided, if you choose wisely.

Here are some of the points that has got to be on your checklist when you shop for credit cards:

Chargeable Interest

It is only natural for people to go on a spending spree when paying for your bills is only a swipe away. What most of us fail to realize is that we need to pay every rupee of what we spend back to the credit card institution. This is where the interest part comes into play.

As long as you pay your bills regularly (before the next billing cycle begins), you are free from unnecessary interest being charged. However, there are times when we might not be in a position to pay our bill right away; this is precisely when you need to take into account the chargeable interest.

There generally two types of interest charged:

- fixed interest

- variable interest

To calculate your personal loan interest rate charges

Hidden Fees

Hidden Fees are obviously never mentioned upfront and come into light only when you least expect it. Therefore, it is important you find out from other credit card users (your friends or relatives) what are the possible hidden charges added on to your bill.

There are also other charges such as annual fees, which is often another form of hidden chrages, because it often has other components such as:

- Charges for increasing credit limit

- Balance transfer

- delay payment fees

- cash advances (if any) and so on.


Credit Limit

Your credit Limit is the maximum limit upto which you can spend using your credit card. This depends on a number of factors such as income, spending habits, main purpose of your credit card and so on.

There’s no set rule wherein you have to spend upto your credit limit, however it will do a lot of good to have a high credit limit especially when you require your card for emergency purposes.


Grace Period

Check out what is the maximum grace period allowed for the type of card you choose. The longer the time you have without extra charges being slapped on, the better it is for you.
Balance Transfer

If you have too much of outstanding (unpaid amount) one one card, you do have the option of transferring it to another credit card from a different bank. Always be very careful while choosing this way out of debt as this isn’t the most ideal one.


Reward Points

Some banks are very popular among merchandisers, where there are constant points back or cash back offers for those banks.

If you are a frequent shopper, then you have got to check out which card lets you enjoy the maximum reward points.


Cash Withdrawal  

Depending on the type of card you have chosen, you can withdraw cash from atms against your credit card, especially when you are in urgent need. Of course the maximum cash you can withdraw will depend on your credit limit. Without a question, this will be added on to your bill at the end of the month.

So, this should give you a good head start on choosing the ideal credit card.

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Priya Rai is a loan consultant.