Know all about credit cards

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Credit card is used for shopping and to pay for your expenses. Hence, it has to be completely linked to your lifestyle.

If you have a car and drive regularly, a credit card with discount on fuel would be ideal for you. Or if you are a frequent flier, a credit card that offers you more flying miles is the one you need to have.

And then there are credit cards that give you access to premium lounges, and other such luxurious experiences too.

So decide on a card that is in sync with your lifestyle and financial behaviour.

The charges

All credit cards come with a cost such as joining fee, annual fee, interest rate and other charges.Joining fee can start from ₹299 and go up to ₹3 lakh for super-premium cards. The annual fee can range between ₹100 and ₹25,000, and usually comes with a clause that says if you spend more than a certain limit, the charges will be waived. Credit cards also charge an interest rate in the range of 22%-48% an annum, in case you default. Other charges include cash advance transaction fee, late payment charges, overlimit charges and card replacement fee, among others.

Reward points

All credit cards can earn you reward points. Every time you swipe the card or make a purchase online, you will get reward points. However, each credit card service provider values reward points differently. Usually, it ranges between 1 and 8 points on every ₹40 to ₹150 spent, depending on the type of card. When you redeem the points, one reward point could be worth 25 paise to ₹1, depending on the type of credit card. Credit card companies also give various offers on dining out and shopping. However, make sure that you don’t over indulge and always pay your bills on time.livemint