5 most important factors to consider while choosing a credit card
Making the decision to apply for a credit card is an excellent method to keep enhancing your credit limit. However, sorting through all of the credit cards offered in India may be a difficult task. Is there any way to tell which card is best for you? If you’re thinking of getting a credit card, don’t be afraid! We’ve compiled a list of things to keep in mind while looking for a new credit card to make the process a little easier for you. They’re listed from most to least important.
Assumption of risk
In contrast to the existing card holders, fresh applicants usually do not have a credit score of their own, and the same is governed by the CIBIL in India. Credit card providers have few effective tools to assess a new applicant’s creditworthiness as they do not have a score.
Personal credit history may thus play a significant influence in the application process for new cards. The customary safeguards provided by a corporate body may not apply if a person provides a personal guarantee as well. One can always enhance the credit limit by pledging their personal assets. When it comes to personal debts, it is important to note that credit card bills are considered personal debts. The order in which costs are paid might be an essential concern for firms that may later experience financial difficulties.
How much limit will be required to take on?
Most of the credit cards are now categorized under the best rewards category that consumers already know about and know how much they can utilize from the limit available to them. You are entitled to gain reward points, premium miles, or cash back for every rupee you spend on your credit card. The greater the interest rate on an existing debt on a rewards-based business card, the less likely you are to use it.
Rewards and benefits are only worthwhile if you can use them:
Consumers gain almost a thousand of reward points or premium miles but they never utilize them. A rewards credit card should only be considered if you can make use of the card’s rewards and benefits. Many of the most popular and rewarding credit cards provide benefits that are best put to use on a trip. It may be tempting to choose one of these cards, but the prizes are of little use to a corporation that rarely travels. To make matters worse, many of these cards come with yearly fees, so you may find up paying for something that you are not using completely.
Cash-back card is always a safe bet for people who are unsure of their reward needs. Cash-back cards are the simplest to use and most beneficial to businesses of all sizes. You might think of it as a 1% to 2% reduction on your credit card bill.
It’s important to know how many cards you’ll need:
Providing a corporate card to staff that travel frequently or host events might make it easier for a business to keep a track of spending. According to the size of the firm, this may require many more credit cards to be added. If your company needs more than one credit card, check to see if there are any additional yearly costs.
Depending on the card, more users may be free, while some may charge the yearly price for additional users. Consider this while choosing a credit card for yourself or your staff.
Transaction and expenditure reporting:
To assist customers in keeping a track of their spending, most credit card issuers offer some sort of reporting and expense monitoring within the banking application. All the expenses made on the card may be downloaded, categorized, and managed by the cardholders. The management of financial statements for keeping a check on overall spending or tax filing is made easier with this solution.
This is a crucial element that helps customers review their financial position on a continuous basis. Keep your financial needs in mind while choosing a credit card.
