With the advent of plastic money sure you are enjoying the power to possess different goods and services before even making payments. But the question here is, are u really enjoying your credit worthiness or actually paying more on the name of free credit? You may call it a privilege but it’s all a money making business so if you are not smart enough using your credit cards you may end a being ripped of by banks. Following are some considerations you should make before buying and while using a credit card.
Your credit card brand decides the acceptance of your card around the globe. Some of the popular brands are Master, Visa, Visa Electron, American express, Cirrus, Maestro etc. Master and Visa cards are most widely accepted card brands. You should get a card with these holograms on otherwise you would keep searching ATMS and merchants accepting your card.
Reviewing and comparing the interest rates is the preliminary thing that has to be done. It is usually seen that credit cards giving you offers like merchants discount, petrol surcharge waiver, gift voucher etc. usually have a higher rate of interest. As a customer you should purely focus on getting the lowest interest rate instead of being carried away by the rewards and the gifts. For example ICICI bank and SBI charge no joining fee and no annual fee but their interest rates are as high as 45.09% and 44.25% respectively. On the other hand HDFC charges Rs 300 as joining fee and 700 as an annual fee on their silver card but it has a low interest rate of 41.75% both in the case of credit and cash withdrawal.
Maximum Credit Free period:
If you really want to enjoy the free ride, you should search for credit cards with the above feature and the one that provides more stretch of time. Most cards provide you 48 to 50 days as grace period.
Revolving Credit and Balance Transfer facility:
It is not just enough to have free credit period but also flexible repayment option. So, you stay easy even after your deadline is gone. In the case of the credit cards with no extended credit facility you have to pay interest on the whole amount from the day of transaction, if you fail to pay your dues on time, but in the case of revolving credit you can pay a part your dues (Min 5% of the principle amount) and then pay interest only on the amount outstanding from the day of your deadline. Cards like HSBC also provide you the option of paying your outstandings at predefined EMIs.