Credit card has become essential nowadays for all, especially to the younger generation. But although it is a great thing to have around, as in an emergency the credit card allows the user to access money immediately, credit card can become harmful without careful utilization of its facilities it.

How to get Benefit from Credit Card

Buy things online: Credit card is a really useful tool to buy things online

Spreading the cost of purchase over months: Credit card is useful when someone is planning to purchase something with an EMI to reduce big cash outflow in a single month

Incentives and discounts: Credit cards usually come with a variety of offers when used to make payment, such as free product or service, discounts from stores, lounge access at airports etc.

What to Check about Credit Card

Annual Percentage Rate (APR): This is the cost of borrowing on the card, if the whole balance is not paid off each month. It can either be a fixed rate or a variable rate that is tied to another financial indicator. However, even a card with a fixed interest rate can change based on certain triggers, such as paying a card late, or going over the credit limit. Go for the card which has, or appears to have, the lowest APR.

Credit limit: This is the amount of money that the credit card issuer is willing to let the card holder borrow. It is undesirable to find oneself in a situation in which he or she is close to maxing out the credit limit. It can hurt the credit score, carries the risk of getting credit limits cut to an amount that’s lower than the current, and also there is a penalty when that happens.

Minimum repayment: This is an amount that has to be repaid if the balance is not paid off each month. This amount should be minimum.

Annual fee: Some cards charge a fee each year for use of the card. The fee is added to the amount due and interest on the fee has to be paid as well as on the spending, unless it is paid in full. But if spending is high enough, a fee card may net higher rewards.

Charges: These range from going over credit limit, for using the card abroad and for late payments.

Introductory interest rates: Initially the rate is low or there is none at all. The rate then increases after a certain amount of time. Look at how long the introductory rate lasts as well as the interest rate it changes to at the end of the introductory period.

Loyalty points or rewards: Check for the variety of shops or transactions where these rewards can be used. Also, the card should offer loyalty points for those goods or services that are relevant for the card holder. Rewards can also include cash back offers.

The attractiveness of a credit card comes down to the spending habit. There is not one particular card out there that fits the bill for all. Careful evaluation of the pros and cons of a credit card before getting one can make life more convenient.