Credit cards don’t bleed your money, they breed it for you!

When choosing a credit card, it’s important to consider the reward rate and certain other factors. It is not always true that a higher reward rate is better for you as some cards may not offer rewards for all categories of spending. So, look at your spending habits before choosing a credit card.

You can save lots of money by using a credit card. Yes, you heard that right. By shifting all your expenditures to credit cards, you can accumulate rewards such as air miles, hotel points, gift vouchers, and cashback.

Since 2016, when I was 24, I have been using a credit card and have accumulated over 2 million air miles and hotel points, as well as a good sum of gift vouchers and cashback, all by selecting the right card.

For beginners, 2 million air miles can be used to obtain a New Delhi-New York business class round-trip ticket seven times if transferred to the appropriate airline.

Alternatively, 2 million ITC Green Points (Hotel Points) can be used to stay approximately 150 nights at luxury hotels like ITC Maurya, New Delhi.

Credit cards are a powerful financial tool that can potentially save you a considerable amount of money. However, to reap the benefits, it is important to choose the best card that suits your needs. What works for me may not work for you. That said, there are certain guidelines you can follow to select the best card. In my opinion, it is advisable to consider five key parameters.

Condition for benefits

Credit cards are often chosen for their benefits and reward systems. It is important to consider the conditions as benefits and rewards vary.
For example, if you are a frequent domestic traveller, look for a card that offers free access to domestic airport lounges. If you often travel internationally, choose one that provides access to international airport lounges. Additionally, you may want to consider other benefits like movie discounts, golf course access, dining perks, and more.

Reward category

When it comes to credit card rewards, it is important to know what type of rewards you’re looking for. There are different categories. If you’re interested in cashback, you should select a card that offers cashback. If you want to earn air miles for free flights, look for a card that offers air miles or the option to convert your reward points to air miles. Alternatively, if you want to redeem your reward points for gift vouchers, a reward-point credit card may be a better choice.

Reward rate

When choosing a credit card, it is important to consider the reward rate. It is not always true that a higher reward rate is better for you. This is because some cards may not offer rewards for all categories of spending.

Therefore, it’s important to check which cards offer the highest reward points for your specific spending categories. It’s possible that the card with the highest overall rewards may not offer rewards for your spending categories. So, don’t forget to do your research.

Online/offline store deals

Another important factor to consider in addition to the reward system is the availability of online/offline store deals. While some cards may not have high reward rates, they may offer attractive discounts or cashback deals for online or offline purchases.

For instance, ICICI Bank may not have the best reward system, but it offers the highest number of online/offline deals in India. Therefore, if you are a frequent shopper, this factor can be crucial in your credit card selection.

Annual fees

Another important factor is the annual fees. Avoid selecting a credit card just because your friend has it, especially if it has a high annual fee of Rs 50,000 or more, plus GST. Instead, choose a card with the lowest annual fees that offers the highest benefits and rewards.

Many cards offer annual fee reversal after spending a certain amount within one year, so be sure to check and select a card accordingly. Remember, the goal is to save money while using your credit card.

By considering these parameters and selecting a card that aligns with your needs and preferences, you can make the most out of it and potentially save a lot of money.