Rising consumerism, booming e-commerce and lifestyle choices have positioned credit cards as a great tool for making seamless purchases while helping keep track of such expenses. Especially for the young adults as they get gainfully employed and look for electronic mode of making payments.
Credit cards have more to offer than simply being means of making payments. Regular use and good repayment track record help build good credit scores, which, in turn, allow customers to get loans in future.
So how do you get started and what is it that you need to know
while making the right choice for your first credit card? Broadly four things can help: Savings from product features and benefits: A good credit card offers multiple savings avenues. So first-time applicants should look at interest-free period, quality of reward point program in terms of points earned per Rs 100 spent and its rupee value on redemption. It is important that the bank offers points that never expire else you stand to lose value in the event of non-redemption on a future date. Perks like cash-back, discounts on movie bookings and dining and offers with large retail, e-commerce or travel companies or fuel surcharge waiver across all fuel stations offer strong value on card usage. Looking for cards with lowest interest rate can make a big difference to interest cost savings in case of revolving balances. Applicants must look at the total annual savings that the card delivers while making a decision. Convenience: Features like complementary domestic or international airport lounge access are big on convenience during travel without having to wait at airport lobbies. Ease of making payment is another consideration. Hence, having multiple payment modes like internet and mobile banking, NEFT transfer, ATM, cheque and direct debit to bank account among others is important. Cards which offer wide merchant acceptance both in India and overseas ensure limited dependence on cash. With the advent of NFC technology, contact-less cards are a secure way of making payments without the card leaving your hand. This is helpful while making convenient payments at quick-service restaurants, fuel stations or for grocery shopping at hypermarkets for a quick check out experience. Customer service: This is the holy grail of a good usage experience. Hence, availability of multiple and seamless channels of service without any restrictions is a critical determinant. It is important to have 24*7 services through phone and other communication channels like email or SMS. Self-service channels like internet banking or bank’s mobile app are helpful while making payments or in emergencies like blocking a lost/stolen card. Banks also offer dedicated lines to ensure timely and responsive services. Knowing the terms and conditions of card usage: This includes knowing if the card comes with any joining or annual fee and benefits linked to the fee; for example, welcome reward points or waiver of annual fee against minimum annual spends, interest rate on revolving credit or foreign currency mark-up on overseas purchases. Understanding how total and minimum amount dues are calculated helps in making payments, in building good credit behaviorand avoidance of any charges like late payment charges. The writer is senior group president, retail and business banking, YES Bank Source : DNA Published Date: Sep 20, 2016
while making the right choice for your first credit card? Broadly four things can help: Savings from product features and benefits: A good credit card offers multiple savings avenues. So first-time applicants should look at interest-free period, quality of reward point program in terms of points earned per Rs 100 spent and its rupee value on redemption. It is important that the bank offers points that never expire else you stand to lose value in the event of non-redemption on a future date. Perks like cash-back, discounts on movie bookings and dining and offers with large retail, e-commerce or travel companies or fuel surcharge waiver across all fuel stations offer strong value on card usage. Looking for cards with lowest interest rate can make a big difference to interest cost savings in case of revolving balances. Applicants must look at the total annual savings that the card delivers while making a decision. Convenience: Features like complementary domestic or international airport lounge access are big on convenience during travel without having to wait at airport lobbies. Ease of making payment is another consideration. Hence, having multiple payment modes like internet and mobile banking, NEFT transfer, ATM, cheque and direct debit to bank account among others is important. Cards which offer wide merchant acceptance both in India and overseas ensure limited dependence on cash. With the advent of NFC technology, contact-less cards are a secure way of making payments without the card leaving your hand. This is helpful while making convenient payments at quick-service restaurants, fuel stations or for grocery shopping at hypermarkets for a quick check out experience. Customer service: This is the holy grail of a good usage experience. Hence, availability of multiple and seamless channels of service without any restrictions is a critical determinant. It is important to have 24*7 services through phone and other communication channels like email or SMS. Self-service channels like internet banking or bank’s mobile app are helpful while making payments or in emergencies like blocking a lost/stolen card. Banks also offer dedicated lines to ensure timely and responsive services. Knowing the terms and conditions of card usage: This includes knowing if the card comes with any joining or annual fee and benefits linked to the fee; for example, welcome reward points or waiver of annual fee against minimum annual spends, interest rate on revolving credit or foreign currency mark-up on overseas purchases. Understanding how total and minimum amount dues are calculated helps in making payments, in building good credit behaviorand avoidance of any charges like late payment charges. The writer is senior group president, retail and business banking, YES Bank Source : DNA Published Date: Sep 20, 2016