Credit cards have undoubtedly become the most popular cash alternative over time. They offer ease of use and repayment and are a great medium to improve your credit ratings as well. It is an essential piece of convenience in everybody’s wallet and is being used for dining, shopping, traveling, etc. However, an undisciplined swiping of Icici credit card can land you in a huge debt trap. Therefore, you must be aware of a few things before you apply for a credit card.

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#1 How to choose the right card?

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With a plethora of credit cards available in the market, it often becomes difficult to choose the right card. You should always opt for the card which best suits your needs and lifestyle. If you love traveling, you may want a card that offers airline miles or hotel points for purchases. Many cards also give bonus miles for new cardholders. On the other hand, if you are a shopaholic, you may want a credit card that offers cash back rewards and discounts on products. Hence, always go for the card that gives you the maximum benefits and privileges, according to the categories you spend on.

#2 What is the joining fee and annual fee?
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Not all credit cards come with a joining or annual fee. And if they do, make sure these cards come with adequate rewards such as extra air miles, free fuel, cash back, reward points, etc. Thus, you should compare joining and annual fees of different lenders before you make a choice.

#3 What is your credit limit?
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It is the maximum amount that you are allowed to spend set by your bank on the basis of your credit score and income. Needless to say, it differs from person to person. If you pay your dues on time and your bank thinks that you are a credible borrower, then it may offer to increase your credit limit. Make sure that you do not spend beyond the credit limit as you may be charged for this.

#4 What is your cash advance limit?

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This feature comes to your rescue during cash emergency and allows you to withdraw cash from ATMs using the credit card. There is also a limit as to how much cash you can withdraw. Generally, the limit set by the bank is lesser than your credit limit. However, this should be used as the last option, as the interest rates and fees charged on cash advances are relatively high.

#5 What happens when you only pay the minimum amount due?

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You must pay your outstanding bills on the credit card before the due date to avoid any interest and penalty charges. But, if you pay just the minimum amount, you will be charged interest for the whole amount utilized. So, it is better to pay off the outstanding amount within the interest-free credit period.

#6 Is credit score important to get a credit card?
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Yes, your credit score helps determine the type of credit card you can get. This is because when you apply for a card, the credit card issuer will run a credit check before approving your application. By doing this, credit card companies see whether you’ve made timely payments on other credit and loan accounts and determine if you have a stable income.

They check your credit score to make sure you meet the bank’s criteria for the particular card you’re applying for. If you have an excellent score of 700 and above, your credit card application will get approved without any hassle.

So, before applying for a new credit card, make sure to ask yourself the six questions above. This way, you can make an informed decision before submitting the application.