So, how can one choose a credit card that suits their needs? One way to do so is by analyzing their spending habits and lifestyle needs and knowing how they would want to use a credit card. Next, an individual may research and compare credit cards and choose the suitable one according to their spending needs.
How to Select the Best Credit Card in UAE
Below is a checklist for selecting the most suitable credit card and some things an individual must keep in mind before applying for one:
1. Spending Habits
If an individual frequently travels, choosing a travel credit card that offers benefits like free lounge access, discounts on flight tickets, priority privileges, etc., can be an ideal choice. On the other hand, if an individual likes to indulge in shopping, entertainment, or fine dining, a credit card that offers discounts and rewards can be a better choice. Alternatively, a cashback credit card can benefit an individual who wants a percentage of cashback on every eligible retail purchase. Hence, how an individual plans to use a credit card influences their choice of a credit card.
2. Annual Fees
Most credit card companies charge an annual maintenance fee. Some credit card companies may waive these charges in the first year and may even continue to do so in the following years if the individual reaches the minimum spending limit for that year. Credit card companies may levy other fees and charges, such as joining fees, renewal fees, ATM withdrawal fees, international transaction fees, over-limit fees, etc.
3. Annual Percentage Rate (APR) Charged
Credit card companies allow individuals to borrow cash, apply for loans, and convert large purchases into smaller monthly installments while charging an Annual Percentage Rate (APR) on the borrowed funds. Individuals who fail to pay the outstanding balance in full or in part will also be charged an Annual Percentage Rate (APR). The cost of borrowing or the Annual Percentage Rate (APR) represents the yearly interest levied on the borrowed funds. Annual Percentage Rate (APR) generally ranges from 0.75%-3.5% per month based on the chosen credit card.
4. Rewards and Benefits
Most credit cards offer rewards and benefits like air miles, bonus points, cashback offers, reward points, etc to cardholders on eligible retail purchases. To reap the maximum benefits of a specific card, applicants should select a credit card based on their spending habits. Cardholders should also take note of rewards criteria like minimum spending requirements and eligible transactions to maximise the benefits of their credit cards.
Before choosing a credit card, people must know why they might want a credit card and then look for one that meets those needs. As credit card bills only come at the end of a cycle, individuals may not feel the pinch at the point of the purchase and hence, may tend to overspend or get into debt. Still, when used wisely, it can be a valuable and rewarding financial tool. Different credit cards cater to the various spending and lifestyle needs of customers. Hence, customers must choose the right card by referring to the above checklist to fully enjoy its features and benefits. Interested customers can apply for credit cards online from the official websites of banks or credit card companies.
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