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Which is the right credit card you should apply for?

What is a credit card?
A card issued to someone (cardholder) on the basis of a line of credit and a supervised account, to grant access to the cardholder for payments to any merchant is called a credit card. Depending on the line of credit, the cardholder borrows this money for the payments being made for which he/she agrees to pay back the issuer along with interest for the transaction(s).

A credit card differs from a cash card. Since it is not necessary for the holder to clear the amount due at the end of the month; he/she can extend it as a recurring debt and clear it later, subject to a sum of interest.

Applying for a Credit card

When applying for credit cards in India or international banks one should adhere to the prescribed ‘Dos and Don’ts. For digitization of currency comes with great benefits but also a few setbacks. Therefore, one should form an analysis of the payments that he/she would be making using the card which will allow the user to apply for a particular category of credit cards. In today’s world, banks provide you with a variety of credit card options to choose from and as a rational customer you should apply for the category which provides you with the maximum utility.

Types of Credit card

The most common types of credit cards in India have been categorized based on a particular area of expenditure. A few common categories in practice are on the basis of:

1) Lifestyle – if you use the card mainly for shopping, dining out, etc. Lifestyle credit cards offer maximum utility as they are designed to reward you with bonuses and cash back.

2) Travel – credit cards providing you access to airport lounge facilities and other rewards on your tours and expeditions.

Customized cards for each Individual

Presently credit cards are personalized for an individual and while applying for one, do look up the benefits in store for you and whether or not it entails benefits that makes using the credit card more feasible. However, your credit score plays an important role here. The card you get is based on your credit score which is estimated by the bank.

A bank or the card issuing body forms a revolving account for the subscriber and associates it with a credit score which estimates the borrowing power of the cardholder. This procedure is the reason most people apply for a credit card in the same bank they have an account in. However, this puts you in a tricky spot as the bank might hold you liable in case of abnormal activities by your card (even when you are not involved in it). Such incidents have occurred with various clients in the past. This is why just applying for a credit card from the same bank might not always be the best option.

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