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Unlock the Benefits by Choosing the Right Credit Card for Your Needs

5 MinsNov 16, 2022

Kiran Marathe, 26, works in the Human Resources department of a large company. She wants to apply for a credit card. But when she did a little bit of research online, she was overwhelmed by the number of different cards offered by various banks and didn’t know which one to choose.

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Kiran spoke to her Axis Bank Relationship Manager (RM) to get a better understanding. The RM told her that a credit card is much more than just a convenient mode of payment. Each card has features like reward points, cashback, discounts and other benefits. The important thing is to choose one that works for Kiran.

Eligibility requirements:
Eligibility requirements vary depending on the cards. Some require a higher income and credit score. Kiran should check which cards she is eligible for and only shortlist those. There is no point in applying for a card with a higher requirement, being denied and in the process denting her credit score.
Also, she should never apply for too many cards in a short time as this is regarded as a sign of desperation by banks and hurts her credit record.

Figure out spending patterns:
Ideally, Kiran should figure out her spending pattern and align the card benefits with it. For example, if she uses her two-wheeler to commute to work, it might make sense to look for a card that offers cashback on fuel refilling. On the other hand, if she is more likely to shop online, a card that provides discounts on portals like Flipkart may be more beneficial.
The RM told Kiran that she should read the fine print to fully understand how benefits such as cashback and discount work. There could be riders, disclaimers or minimum spending limits that banks may impose. By developing a fuller picture, she can make a more informed decision.

Credit Limit:
One of the essential criteria has to be the credit limit offered. With some research, Kiran may find that different banks and cards offer varied spending limits at her income and credit score level. A credit limit is the maximum amount the bank will allow you to spend on the card. Ideally, Kiran should choose one which offers the highest credit limit.
However, the RM warned Kiran that she should not be spending to the full extent of her monthly credit limit. This is regarded as negative by the banks. Ideally, her monthly spending shouldn’t exceed 50% of her limit. This will boost her credit score. A higher limit would mean she can stay within this 50% range while meeting all her requirements. Additionally, a higher limit can come in handy in instances like a medical emergency.

Kiran, the RM said, should also make a budget that she plans to spend on her card every month and see which card offers the best benefits in terms of discounts or cashback for that budget. For example, if her budget is Rs. 15,000 for paying utility bills and shopping, and if she chooses a card that offers a 10% cashback on such spending, she could easily save about Rs. 1,500 per month.

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Annual fees:
Most banks offer some card variants that do not carry any annual fees. While this may seem attractive, other features of such cards are often quite limited. Different variants come with hefty annual fees but offer various benefits that may not interest Kiran. She should look at these criteria and then make an informed decision.

Other benefits:
Several cards offer benefits like airport lounge access, enhanced loyalty points, discounts for international travel and hotel bookings. Kiran should see if such features matter to her and then decide.
The RM also emphasised that irrespective of what card Kiran chooses, she should, ideally, always pay her credit card bill in full and before the due date. She should also avoid paying just the minimum amount due on her bill.

Axis Bank offers a wide range of credit cards with multiple benefits. These are tailored to the requirements and spending patterns of its customers. All Axis Bank credit cards come with Edge Reward Points that can be redeemed for shopping or availing of discounts. Axis Bank is running LTF (Lifetime Free) offer on IOCL credit cards. Additionally there is an Amazon voucher worth Rs. 500 and cashback of Rs. 500 on fuel spends as part of the offering. To find out which card works for you, click here.

Disclaimer: The Source, a content creation and curation firm, have authored this article. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.