Lot of my readers requested me to write a post on tips to select the right credit card. In my previous posts on Credit Card, i highlighted the benefits of using credit card and how can we use credit cards smartly to our advantage. In this post i will suggest 7 most important tips to select the right credit card. It is very important to select the right credit based on your requirement else rather giving benefit, it will eat into your savings from credit card.
1. Say No to Co-Branded Credit Cards: Over last few years, Credit Card Market is flooded with C0-Branded Credit Cards. Banks launch these credit cards in association with a particular brand like ICICI Big bazaar Credit Card, Jet Airways ICICI Bank Credit Card, Standard Chartered Yatra Credit Card, HSBC MakeMyTrip Credit Card, SBI Railway Card etc.
The disadvantage of C0-Branded Credit Card is that all the benefits of credit card is associated with partnered brand e.g. in ICICI Bank Big Bazaar credit, you will get 6 reward point for Rs 100/= spent in Big Bazaar but for Non Big Bazaar purchase, you will get only 1 Reward point for Rs 200 spent. Therefore these cards are most beneficial for Big Bazaar becoz they are buying customer’s loyalty through this card as user of this card will try to make almost all the purchases through Big Bazaar.
Banks gain becoz partnered brand promote co-branded card heavily through its channel and bank gets more credit card customers without much efforts. Only looser in this chain is User of Co-Branded Credit Card. You can opt for such cards, if u have very very high level of engagement with particular brand else they are waste.
2. Cash Back Cards: Cash back cards are still in a very nascent stage in India becoz of 2 reasons
(a) Annual/Renewal fees
(b) If’s & buts attached with the cash back offer e.g. In a Manhattan Platinum Credit Card, Minimum amount spend should be Rs 1000/transaction to be eligible for 5% cash back or in a Kotak Trump Gold Card, Minimum spend on Dining and Movies should be more than Rs 5000 within billing cycle to enjoy 10% cash back & cash back is applicable only for 5 transactions (Dining + Movie) upto maximum of Rs 600/= in a billing cycle.
It is very important to understand your spending pattern before applying for cash back credit e.g. if u spend more in departmental and super stores then you should opt for Manhattan Platinum Credit Card and if ur spend is more on utility bills then Standard Chartered Super Value Titanium Card is fit for ur requirement as it offer cash back of 5% on fuel @ all petrol pumps + Telecom payments + Rest all utility bills.
Though these cards carry Annual / Renewal Fees but the benefits outweigh the cost. Shortly, i will write a post on Best 5 Cash Back Credit Cards in India.
3. VISA/Master Card Payment Systems: All credit cards carry a logo of VISA, Master Card, American Express, Maestro etc etc..Many people gets confuse that credit card is issued by VISA or Master Card..Fact of the matter is that VISA or Master Card don’t issue any credit card but they are payment systems, which process payment between Merchant Bank and the bank, which issue credit card. In other words they are dependent on banks to issue credit / debit cards by using their payment system.
VISA and Master Card are 2 biggest payment systems in world & you should own atleast 1 card each of VISA and Master Card becoz
(a) VISA / Master Card always run offers for their customers to increase usage on their payment system e.g. VISA Blockbuster weekend offer of Buy 1 get 1 Free on Bookmyshow or Get discount from 5% to 10% on Apollo Clinic, using Credit Card with Master Card Logo. Before making any purchase, its better to check for offers as Rupee Saved is Rupee earned.
(b) Outside India, you will find many merchants excepting only VISA or Master card so if u travel abroad then you should own 1 card each of both the payment systems to avoid any inconvenience.
4. Reward Points: Most critical point to decide credit card…Reward point is nothing but an incentive to use your credit card or you can say its indirect discount on your purchase. Generally each Reward Point carry a value between 25 paise to 50 paise…It is very easy to find out the value of Reward Point. Just check reward catalogue from bank’s site and find out the Market Value of any item in Reward catalogue and how many points required to redeem this item e.g. if a Philips toaster cost Rs 1500 in market & you need 4300 reward points to redeem then value of each reward point is 0.34 paise.
Some banks give higher value per reward point to premium customer and vice versa e.g. HDFC bank i.e. less points required by premium customers and higher points required by regular customers.
5. Flexibility to Change Billing Date: It is very important to know the payment date, which depend on Billing Date. It depend on spending pattern & your salary cycle to arrive at convenient billing date. It is advisable to opt for credit card with a bank, which is flexible in terms of changing Billing date e.g. HDFC bank is rigid in this regard whereas Standard Chartered Bank is very flexible.
6. Interest Free Easy EMI: HDFC bank, ICICI Bank and Citibank are pioneer in this…If u make big purchases like Electronic Goods, Travel etc at regular intervals then its a wise decision to opt for Interest Free Easy EMI option of 3, 6 & 9 months…These days when credit comes at a very high interest rate (Interest Rate on Personal Loan is 16%)…Paying through Interest Free Easy EMI is a big savings even if u can pay lump sum, it is advisable to opt for Easy EMI as you can get interest on the amount. Some of the offers currently live are, you can convert all purchases through HDFC Bank Credit Card at LG Best Shoppe into 3, 6 or 9 months Easy EMI or you can convert all ticket bookings through makemytrip into 3, 6 or 9 months Interest Free Easy EMI by using ICICI, HDFC or Citibank credit card
7. Ease of Payment: Before applying for credit card just check the payment options. Though most banks provide option to pay through net banking or NEFT but for many people, its not a convenient mode to pay..Just check whether your convenient mode of payment is available for credit card payment. If your convenient mode is cheque drop then check whether the ATM of bank is located near your home or office.
Though there is no set rule to select the Right Credit but it depend on your requirement and spending pattern. According to me, you should not have more than 2-3 cards to maintain good CIBIL score. Out of 2 credit cards, one should be of largest issuers like HDFC or ICICI and second one should be Cash back credit card. Maximum transactions should be on Cash Back Credit Card to get maximum benefits. Also one of the card should be on VISA payment system and another on Master Card. Hope u liked the tips to select the right credit card.
Copyright © 2011-2012 Nitin Bhatia. All Rights Reserved.
nice article
What are the credit card banks that allow us to change due date?
As per my knowledge ICICI Bank provide facility to change billing date after 1st billing cycle.
Dear Sir! Thanks for this article. I have been using Manhattan Platinum Credit card for the past 5 years (with no joining fee and annual fee) and getting cash back of at least Rs 200 per month. However the benefits have been reduced over the years. It actually started with minimum spend of Rs 500 in departmental store for cash back, which has been increased now. But its the best cash back card I have used so far. Another good cash back card is Citibank Cash Back card. I am using that too. Kindly request you to write an article on best 5 cash back credit cards.
Sure, i will definitely write but there are not too many cash back cards offered by banks.
Yes sir, that’s correct. Thanks.
Hi Nitin, just would like to get your opinion on HDFC Corporate Credit Card – Diners Club Rewardz.. they say different cash back with Life Time Free with no condition. Do you have any information regarding this. I always been your follower and all your articles are worth a read
At macro level, i prefer corporate credit cards as they are bundled with lot of features. At the same time, the acceptability of Diners Club credit card will be limited compared to VISA or MasterCard. Personally i will not prefer diners club credit card.
Thanks a lot Nitin. Just would like to know a normal HDFC Corporate VISA Card would be good if it is LFT.
It will be good to go.
Hi Nitin,
First of all, thank you for your insightful posts, I always refer them :)
Request your advice.
HDFC bank is giving an offer for life time free credit card…
Diners Rewardz, Moneyback, AllMiles, Solitaire, Diners Premium, Regalia
Which one should I opt for, most of my purchases are electronics, grocery, retail, travel/hotel bookings domestic/international.
Solitaire is more women friendly, but i dont see much benefits as I would require the credit card not only for retail shopping.
Also, when they say life time free does it mean, the annual fees are waived off for lifetime. Please advice. Thank you!!
You may opt for Money Back CC. Mis-seliing is very common in Credit Card. Life time FREE is bit subjective, you should mention same as a note in Most Important terms and conditions before signing the same. It will be great if you will take photocopy of Most important T&C signed by you for your reference.
Thank you very much Nitin.
Hi Nitin, thanks for the informative article. I will really appreciate it if you can tell me which is the best credit card for making payment through emis. In particular, I am wanting to buy a laptop and undergo a hair transplant surgery.
Almost everyone charge same rate of interest still i will prefer HDFC Bank or ICICI Bank credit card.
Thanks a ton!
Can you let me know which citibank card would be best for multipurpose use ? between cashback and rewards card. Have telecom and utlity bills but also other online transaction too.
Also, which card would be better scb super value or citi cashback ? And is rewards card a better option than cashback ?
I will prefer cashback credit card. In that considering your requirement i will opt for citibank cash back credit card because of 5% cash back on phone and utility bills.
Hii Nitin
I am planning to take my first credit card. I have shortlisted following cards-
1. Citibank Rewards Card
2. Standard Chartered Platinum Rewards Card
3. ICICI Bank Coral Credit Card
Please suggest me which one to choose. I am looking for a card with best overall benefit.
Please reply.
There is not much difference. I will prefer ICICI Bank Coral Credit Card.
Hi Nitin,
Which would be best cash card in India ?
1) Standard Chartered Super Value Titatnium Card
2) 1) Standard Chartered Manhattan Platinium Card
3) Citi Bank Cash Back Card
Or any other bank’s cash back card.
Please suggest me one good card for multipurpose use. Have few utility bills but most of my transactions are in USD to pay server bills.
Nothing much to chose but i will opt for Citi Bank Cash Back Card
Is there any good cash back card from HDFC ? I came across some good reviews about Citi bank cash back card. Currently using HDFC Regalia Card. Should I opt for other hdfc card which offers cash back ? And if yes which card?
HDFC has Money back credit card. Normally such cards are issued with lot of caveats. It also depend on your spending behavior. You may opt for Citibank cash back credit card.
Hi Nitin,
I had been to USA for 14 years and from last one year working in India. I applied for HDFC Credit card but they said they won’t be providing credit card to me. Similarly, ICICI too rejected my CC application. Finally as I badly needed one I applied for SC Landmark credit card and received it just a month ago.
According to you, HDFC and ICICI are market leaders and hence one should have their cards. But why are they so arrogant and reject CC application when my salary and CIBIL score etc are quite good ?
Honestly, I am not happy with SC customer service but have to use it for time being till I get some good card.
Can you suggest any good card other than HDFC, ICICI for multipurpose use ? Few of friends suggested me Citi bank CC and they say there service etc is quite good. I not quite sure, but now I do not want any application to get rejected for any reason.
Every bank has its own risk assessment and customer profiling/screening process. As I keep highlighting that good credit score/salary does not guarantee credit card or loan.
Personally I concur with you that HDFC Bank and ICICI Bank provide good service and offers as they are market leaders. You may opt for secured credit card from either of these 2 banks. If your credit behavior is satisfactory then you will get regular credit card in 12-18 months. Please check my following post for more details
https://www.nitinbhatia.in/personal-finance/secured-credit-cards-repair-cibil-score/
Thanks Nitin for your valuable suggestion. Should the first priority be Hdfc as in true sense they are the market leaders.
Secondly, you suggested in your post to have one cash back card. Is Citibank good in terms of service if I apply for it ? I mean in comparison with Hdfc, icici ?
Lastly, I have an account in yes bank i.e salary account. Yes bank launched credit cards recently. My RM is behind me to apply for the same. Should I go with new market entrant like yes bank ?
It is your personal choice i.e. between HDFC and ICICI.
You may go ahead with Yes Bank as new entrant always roll out more offers compared to existing banks in order to gain market share.
Hi,
I want to apply for lifetime free credit card. I am using Citibank cash back credit card from past 8 months. I came across standard chartered Landmark credit card and thought that it is good as long as there is no annual fee for it.
However, when I did google search I came across plenty of articles which gives very bad review about standard chartered bank CCs. Should I go with SC CC or should I refrain from using thier CC ? I am afraid regarding hidden charges etc and should be able to cancel their card without any issues provided I pay all their dues before due date.
If you are not convinced then you should not apply for standard chartered Landmark credit card. You can also check trail comment from Mr. Omkar Joshi on this credit card and my reply on the same.
Hi Nitin,
I want to apply for anyone of these cards – hdfc regalia card or sc manhattan/super value titanium . I am currently using citibank cash back CC with decent credit limit.
Now, the question is should I apply on the basis on of my current CC or salary slip ? with which will I get good credit limit ?
Some people say that applying on the basis of other bank’s cc, you will get approx. twice credit limit on the new card.Is it true?
However, some suggest that applying submitting salary slips will make bank offer you more credit limit.
On what basis should I apply ?
lastly, Is hdfc regalia more beneficial than than the sc manhattan etc ?
You may apply based on salary slip though the bank will know existing credit limit from your CIBIL Score. Therefore, credit limit of new card will be difference between credit limit eligibility and credit limit utilized.
Hello Sir I want to apply for credit card i want to used it for buying electronics and other online stuff on EMI i have account in HDFC and i am eligible for only few Cards and HDFC Regalia is one of them. please help me if it can be used to do that kind of shopping like on samsung lg or apple store please help.
You can use credit card at any store that accept credit cards as mode of payment. All the stores of LG, Samsung etc accept credit cards. The offers like interest free EMI, cashback etc will depend on bank to bank.
Sir, I have saving bank account with hdfc and Yes Bank. Both are ready to offer me cards based on my relations with bank and Annual income.
HDFC is offering me Regalia card and Yes is offering me Yes First preferred Card. With which one should I go ? As you mentioned that one should have a CC from market leaders like HDFC or ICICI. I need to pay for server and hosting bills and hence spend hundreds of dollars every month on CC. Yes first preferred has the lowest FCY markup fees i.e 1.75%. In long run which bank CC would be beneficial ?
Considering your requirement, you may opt for Yes First preferred Card.
Hi Nitin,
I am looking for a new CC. My monthly spend on CC will be around 50-60K with most of the spends being on Hotels and Dining. Can you suggest a good CC with either good rewards or Cashnack component.
Regards,
There are large no of options available. I suggest you to shortlist 3-4 Credit Cards based on the tips shared by me and then we will finalize the best option.
Hello,
I have a salary account with ICICI and have enough CIBIL. My utilization goes in the order 1. Shopping, 2.Groceries, 3.Utilities, 4.Travel and 5.Movies. Kindly suggest me some options.
You may opt for cashback credit card.
Hello Sir, I am recently going to visit Usa for exams and studies. I would be spending atleast 1000$ in next 3 months for my exam fees and later would be travelling to USA at the end of this year. What type of credit card should i opt for. Later on plan to stay in US for 2-3 years also
You apply for local credit card in USA.