Apart from the exciting and often tempting credit card offers, have we ever looked at the fine print, the stuff that actually makes the difference between a good and a bad choice? Most probably, not. Here is some information you should always look at before you opt for a credit card.

Here is some information you should always look at before you opt for a credit card.

Fees and charges

Annual fees: Some credit card companies charge you an annual fee just for using their card. However, due to stiff competition most companies offer ‘lifetime free’ cards with no annual fees. However, it is always worthwhile to ask whether this would be an offer that will continue irrespective of any clause or condition.

Interest charges: If you use the card and have not paid back the entire amount; most banks charge over 30% to 45% per annum or 2.79% to 3.9% per month on outstanding amounts. Check the amount of interest charged on the outstanding amount by the credit card company you are interested in.

Overdue/late payment charges: For overdue accounts and payments the amount spent by the bank in recovering it using collection agents is charged to the customer. Also, when you are late in making any of your payments you are charged additional late payment charges which can range anywhere between Rs 500 and Rs 1,000.

Cash advance charges: If the card holder withdraws cash from the ATM, there is a cash withdrawal charge apart from the fact that interest starts to be clocked in from the moment cash is withdrawn. These charges differ from company to company.

Duplicate statement charges: Many banks charge anything between Rs 25 and Rs 200 for duplicate statements.

Incentives and rewards

Many credit card companies offer many incentives and rewards to people when they spend from the card. It is always good to understand which purchases do you mostly make with your credit card and then choose a card that gives you the maximum reward or incentives.

Airline credit cards: For every purchase you make through the card, you accumulate ‘miles’ or points which you can redeem if you are flying with the airline that the credit card company has tied up with.

Cash back cards: Many credit card companies offer cash back on the purchases you make. These cash backs can range from 2% to 5%. Other types of cards offer discounts and special offers to card holders when they shop from a specific establishment that the credit card company has tie-ups with.

Additional perks

Many credit card companies go out great lengths to woo new customers. There are companies which offer free insurance. Some offer ‘mediclaim’ policies for immediate cashless medical assistance. Some offer emergency travel assistance. Some offer free holiday packages.

Bottom-line is that prudent use of credit cards can help you lead a better life. Remember, always research what perks your credit card company provides.