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Monday, January 15, 2007

How to choose the right credit card

Friends, This is very useful information before you approach for any credit card agent. As I personaly have some bad experience regarding the credit cards.
So I think this should not happen with you !



While shopping for a credit card, it is important to keep these tips in mind: Whether you are paying for your lunch in a hotel, clothes at a designer outlet or cosmetics at shopping malls, nothing is more convenient than a credit card. But the question is how to get the best deal or select the right credit card for you. The credit card market is ferociously competitive. Card issuers are fighting to win you with increasingly tempting offers, such as interest-free introductory periods and perks.

Shop around for the plan that best fits your needs
With the differing rates and features of each card, choosing a card to fit individual lifestyles can be difficult. Which card is best for you depends on how you plan to use it. People use credit cards in different ways. Some basically use a credit card for identification when making hotel reservations and renting cars. The most important factors for these users would be wide acceptance of the card and the annual fee charged.


Know the grace period
For people who pay off the entire balance every month the first priority in a card is to be sure it has a grace period and to know the length of the grace period. Another important factor could be the credit limit.

Low-interest rate
People who sometimes have an unpaid balance at the end of the month would want to choose a card with a low interest rate and a grace period.

Calculation of the interest
For those who usually have an outstanding balance, the most important feature is the calculation of the interest. These users want to get the lowest interest rate possible.


Cash-advance charges
A 'cash advance' means you can withdraw money from a bank against your credit limit. Check out if the bank has any ATMs near your house or workplace. This surely helps in times of emergency. Service fee (transaction fee) each time you take out money, and interest rate for the period for which you have used the money - until settlement date.


Other charges
Almost all card companies will penalise you each time you make a late payment. Some offer protection services against this fee; others charge a bomb. Check this out.



Acceptability
Distribution networks are important. The acceptability of the card at diverse establishments should also be considered while selecting a card.


Lost card liability
Most card issuers mention in the brochures that lost card liability is Rs 1,000. Be careful, that this is actually after it is reported to the bank. Avoid banks that make you liable even for card misuse for a single minute after reporting it.


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.


Helpline
A 24-hour helpline service from the card company helps the cardholders during the non-banking hours.


Peer feedback
Ask friends and acquaintances about the cards they use. They will have good and bad experiences to relate–use this information in your hunt for the perfect card.



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