How to select the best Credit Card for Online Shopping?

What are credit cards? How are they any different from other cards?

A credit card is essentially a financial tool that helps you borrow money from a financial institution. It works on the concept of borrowed funds, which means that the cardholder does not have that amount in his bank account but can borrow that amount of funds from the financial institution. This amount is generally used to make purchases, pay bills, etc. 

Many credit card providers often believe in balances to be set off or paid in full or in parts or at the end of each month. It helps the bank or any other financial institution to balance their bank account. Any remaining balance rolls over to the next month, and interest is charged on the unpaid portion. In any other scenario, where the cardholder does not pay the balance, then the whole amount gets carried over to the next month, and interest or penalties are charged on the whole amount. 

One important thing to keep in mind is the credit score. This credit score is extremely important as it makes use of the credit card usage and payment history of cardholders, which affects their ability to borrow funds in the future. So make sure that you maintain a perfect credit score to have no negative impact on your future borrowings.

Credit cards are quite different from debit cards as these debit cards are linked to the cardholder's bank account and allow them to spend only funds that are available in the cardholder's account.

How to select the best Credit Card for Online Shopping?

While selecting the best credit card for online shopping in India, you must consider a wide range of factors. This is to help you get the credit card which gives you the most value security and, at the same time, a lot of discounts to help you with purchases. 

Here are some factors that you can consider while selecting the best credit card for your online shopping excursions:

1. Determine Your Spending Habits:

The first factor to be considered would be to analyse what you spend the most. Are you someone who spends a lot on fashion, travel, or day-to-day items? Figure out where you spend the most of your funds. Once you determine this, it will help you in your search for looking out for a card that offers the most rewards and cashback in these particular categories.

2. Choose the Right Type of Credit Card:

Once you have determined what your exact needs are, then you can search for a kind of credit card that aligns with your needs. If you are a travel person, then look for a travel credit card which will give you travel perks such as airline miles, hotel rewards or even travel insurance. If you are a person who shops a lot, then look out for a card which gives a lot of cashback.

3. Review Annual Fees:

While credit cards offer a lot of benefits, let's not overlook their fees. Credit cards work based on annual fees. This means that a person has to pay a particular amount for the available availability of the credit card for the whole year. Over the years, they might even have to pay extra penalties or charges depending upon their usage. Make sure that before you finalize on a particular credit card provider, you evaluate whether the benefits and the fees quotient are justified.

4. Compare Interest Rates:

While researching different kinds of credit cards that you can avail benefits of, make sure that you even compare their interest rates. If you feel that you might not be able to pay your credit card dues on time and you are someone who will carry forward the balance amount each month, then make sure that their interest rates are low. This will reduce the interest charge and penalty amount.

5. Check for Foreign Transaction Fees:

One important point to look out for when shopping for your credit card is to make sure that there are no fees applicable on any foreign transactions. The amount of foreign transaction fees could be a reasonable Addition to your whole balance, which would add to your debt.

6. Read the Rewards Structure:

Credit cards have a lot of guidelines regarding their reward structure. Make sure you understand how their points or cash-back system works. Carefully verify if there are any spending capacity limits or expiration dates on these rewards. This will help you carry out transactions with an alert mind.

7. Customer Support:

Customer support is extremely important to have if you are availing a credit card service. Ensure that your credit card service provider offers you reliable customer service that is available 24/7. This will help you address your issues or concerns, if you have any, regarding any transaction that you have conducted.