|How to select
the right Credit Card?-
Decided to go in for a credit card? But not sure
how to select one? The proliferation of cards in
the market would simply clutter the process of choosing.
You could, ofcourse, choose to go with whatever
comes your way, or whatever your friend recommends,
but if you atleast want a sense of some of the questions
to ask, and tricks that you could check to get a
better deal, read on.
Throw up the following questions to decide on the
right Credit card :
1. How much is the joining
fee and the annual fee?
Generally, a card with a higher annual fee enjoys
more benefits like higher credit limit, higher accident
insurance cover, accessibility to airport lounges,
travel discounts etc. Or atleast this use to be
the case. With cut-throat competition between the
card issuing banks, players are ready to waive joining
fees and also one-year membership fees for anyone.
Grab these offers, or negotiate this for yourself.
2. How much is the Add-on
If you are interested in buying add-on cards for
your children, spouse or friend, ask for the add-on
card fee. Remember that you will be settling the
bills on the add-on card that you so touchingly
gift to someone dear to you - the statement will
come to you, and the responsibility for payment
is yours (as far as the credit card company is
3.What is the interest
This is actually a question that you should be
asking fairly soon in the discussion.
Remember, while the upfront one off fees are bread
and butter for the credit card company, this is
the jam! If you're the sort who forgets to pay
on time, or likes to live it up and live off credit,
the interest rate would be of paramount importance.
Most credit card companies charge anywhere between
2% to 3 % per month. (Read a whopping 35% to 43%
per year). That's where they make their gravy,
and that's where you pay!
It is always advisable to pay off the entire amount
on due date, or, if you have a large bank balance,
look for card companies that provide the transfer
balance facility. The balance transfer rate is
lower for a certain period (say six months) and
then the normal rates apply. But again this is
a temporary solution to a chronic problem.
4. What is the reach?
Not an important question - most outlets in India
accept both the Master card and the Visa card,
and most credit card companies provide Visa or
Master cards. So its fairly simple, and does not
need much head scratching - they're all more or
less the same. One thing you could do is to check
out for the Automated Teller Machines nearest
to your house or work place(ATMs - almost all
credit card companies now provide you the facility
of withdrawing cash from machines - I guess for
things that cards just cant buy. These machines
are called ATMs, and are helpfully scattered all
over the city/country/world.).
Having more ATM outlets in Thailand wouldnt
be of any relevance to a person who rarely travels
abroad, though it may certainly be a goal to work
towards after buying the card. Please also remember
that Amex credit cards are not part of the Visa/
Master chain, and have a separate chain of outlets
where its accepted.
5. Is it a Global card?
Now this could be useful to you if you are an
overseas traveller. A Global card can be used
for paying expenses in foreign currency just like
you use a credit card to pay in rupees. Nowadays,
a Global card is being issued at the same cost
as for a similar domestic one. It is better to
have a global card, especially if there is no
6.How useful are branded
or affinity cards?
A partnership between a card issuer and the non-profit,
social or lifestyle association is what results
in an affinity card. This is for providing financial
rewards to the group or association. E.g. Citibank
Womens card, Citibank WWF card. Citibank
WWF Visa card donates a percentage of the transaction
value made through the card to the WWF fund for
its environmental conservation activities. A subscription
to such cards helps ease the conscience though
it provides no monetary value.
A partnership between a bank card issuer and a
commercial partner result in a co-branded card.
This entitles the cardholder to lots of freebies,
prizes, discounts on co-branded products. Logic:
If a customer is loyal to one brand, he will want
to purchase the other. So if you were loyal to
a particular brand, it would make sense going
for those co-branded cards. For e.g. Citibank
and IOC, Bank of India and Taj group of hotels
7. What`s the lost card
Most Card issuers mention in the brochures that
lost card liability is Rs 1000. Be careful, that
is actually AFTER it is reported to the Bank.
The liability is actually unlimited before reporting
(in cases like this, you would actually thank
the credit limit because though the liability
is unlimited - the ceiling should logically be
your credit limit, and the outlets accepting your
stolen card should actually check that you (or
the person who stole your card) havent exceeded
your credit limit).
Avoid banks that makes you liable for card misuse
for a single minute after reporting it.
8. Are there any freebies?
Citibank gives a Ponds gift hamper free
on subscription to its Citibank Women card. Personal
accident insurance for Air, Road or Otherwise
is packaged along with the subscription. Also
Baggage cover, Purchase Protection cover and credit
shield is bundled free of cost along with the
If you feel one these parameters are important,
then settle for the one that gives a higher cover.
9. Is immediate cash
Check out if the Bank has any ATMs near your house
or workplace. This surely helps in times of emergency.
The cost component for a cash withdrawal could
be classified as follows: Service fee (transaction
fee) each time you pull out money, and Interest
rate for the period for which you have used the
money - until settlement date. If you are going
to withdraw cash frequently, better watch out
for this cost.
10. How long is the
free credit period?
The days of credit one gets depends on the statement
date and the date of transaction. On an average,
you could assume you'd get around 20 days of free
credit. However, if you buy just after the statement
date, you could end up getting upto 50 days of
credit. Look for cards that give you the highest
free credit period!
11. Is a Helpline available?
A 24-hour Helpline service from the Card Company
helps the cardholders during the non-banking hours.
Reporting of theft, checking of available credit
limit and other enquiries can be made by the cardholder
round-the-clock. In the end, like everything else
in life, the card you want is really up to you
- what matters the most to you - credit, reach,
the freebees, international reach or a combination
of parameters. Use our card category on the left
bar to simply list out the names of the cards,
or choose by bank name and see the cards they
Or look for cards offering the lowest interest
rate. Ot the lowest charges on cash withdrawal
(believe me, it gets to be a serious consideration
as one goes along). Go to our shortlist card section,
and search for cards based on any criteria that
you want. Happy hunting, and stay careful - you
may like to use our section on how to use the
card carefully to minimize the chance of its misuse
by someone else.