Choosing your first credit card
When it comes to choosing your first credit card, you can have different people reacting differently. Some people might be a bit nervous. Others might be somewhat skeptical. Some just too excited or too lazy to bother about making comparisons between various credit card offers. However, this is not something that should be taken lightly. Though all the credit cards work in the same manner in the basic sense, they do however differ in terms of the benefits associated with them. A good choice can really have the benefits pile up for you.
First you need to evaluate your needs accurately and completely. You could do it in a bit of formal way, if you like. Just jot down the reasons for why you want a credit card. Different people have different needs and that is exactly the reason why there are so many different credit card offers in the market.
If you are going for a credit card because you sometimes need credit i.e. you sometimes need to borrow money, then one of the most important factors to look for could be the APR of various credit cards. APR determines the interest that the credit card supplier would charge you if you don’t pay the whole amount you owe them (within the stipulated time) i.e. if you make only a partial or no payment of your credit card bill. APR is not a consideration for people who are confident of paying off the bill in full every month. However, if you have even an iota of doubt you should include APR on your list of comparison parameters. Yet another consideration for such people would be the interest free period. However, the variation of interest free periods across various credit cards is not too much.
Some people need a credit card just for the purpose of online shopping or just for the convenience offered by credit cards in making payments etc. For them, the main points to consider would be the credit limit and the shopping discounts etc offered by the credit card. So if you plan to use your credit card for making every possible payment, then you might like to evaluate your monthly expenses and check which credit card offers sufficient credit limit to cover your monthly expenses. If your shopping is concentrated on or limited to some shops in particular, it might be a good idea to check with such shops if they offer a credit card too. Some major retail chains, grocery stores and other big shops, offer credit cards which entitle you to discounts when you make payments at their shop using the credit card issued by them. Similarly, if you travel a lot, a credit card which offers you travel discounts or free travel insurance might be a better bet. A lot of airlines and hotels offer such credit cards. Some of these also include discounts on car rentals. For people wanting to do a lot of foreign currency transactions on their card, the commission charged by the credit card supplier or the currency conversion rate applied by the credit card supplier (vis-à-vis others) might be an important factor.
Another point to note is that filing an application for a credit card doesn’t mean that you will get the credit card for sure. The credit card companies have their application scanning and approval procedures which they use to determine whether a particular individual is qualified/worthy-enough to get a credit card from them. The parameters include things like your age, your pay-back capability, your credit rating etc. It’s worth noting that some credit cards are designed keeping in mind some special needs too e.g. you have small business credit cards for small businesses, student credit cards for students, dependent credit cards for dependents and debit/secured credit cards for people with bad credit rating.
So just make a good choice and enter the world of credit cards with confidence