Credit cards: 6 key factors to consider when choosing a lifestyle card

Credit Cards: If you are planning to apply for a credit card, make sure that you opt for one that closely resembles your spending habits. Before you choose a lifestyle credit card, several criteria should be factored in.

These include annual fees, extra perks, welcome bonus, hidden charges and brand collaborations, among others.

Here we list some of these factors

I. Brand collaboration: Some credit cards are co-branded, such as Amazon ICICI, Flipkart Axis, and Paytm HDFC. If you are loyal to these platforms, you can get higher rewards and exclusive offers.

II. Hidden charges and conditions: It is advisable to check all the charges and conditions such as related to foreign transaction fees, cap on rewards and interest rates.

III. Reward redemption options: Make sure that you can convert redemption rewards into flight miles, gift cards, or statement credit. You should avoid cards with complicated or limited redemption choices.

IV. Welcome bonus: This is a great way to get upfront value; you need to only check if there’s a spending limit to unlock it.

V. Annual fees against the benefits: Several lifestyle cards charge annual fees, which is fine so long as the rewards or perks are greater than the fees. But if you are not a heavy spender, you can go for a card with low or no fees, which offers decent lifestyle perks.

VI. Rewards categories that match your lifestyle: You should carefully examine where you spend the most, i.e., on shopping, movies, eating out, travel, or gym membership. Accordingly, you can opt for a card that gives accelerated rewards (such as 5x or 10x points) within those categories.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.