This the is the maximum amount you can spend at a time, using your credit card. This depends on your income, which the bank refers to when issuing you the card.

The general outlook is -- higher the credit-limit the better! This is not advisable unless you intend to use the credit card limit.

Common Factors We Overlook when it comes to credit cards.

Customer Service

Few years back, customer service was not a greatly developed concept in banking as well as credit cards. Now customer service is a factor to be taken very seriously when going for a credit card. It’s better to go for a credit card offered by a bank with which you already have an existing good relationship.

Reward Points and Cash-back

All banks are trying to attract customer through schemes like reward points. Especially people who intend to use the credit card fairly regularly should look for good reward point schemes.

Shopping Perks

A good credit card is acceptable with most merchants in the town and across the country. Having tie-ups with multiple outlets, which offer great discounts, and shopping schemes are an added advantage. This also includes the waiver of surcharge at petrol pumps and utility bill payments.

The smart way to select a credit card is outlining the needs first. Once you are sure about your needs, you can start looking for market leaders and compare their features to get the best deal.

Author: Ketul Shah

(The author is a Chartered Accountant and MBA specialised in banking, finance and insurance.)