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How to Choose A Credit Card: Thinking Beyond Rewards

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Created on
July 25, 2023


What’s Inside

The Indian credit card industry in India recorded a compound annual growth rate (CAGR) of 20% in the 5-year period ending in 2022. Clearly, credit card usage has shot up in the country. Despite this, not many cardholders are aware of how to choose a credit card smartly for long-term use. This leads to impulse credit card choices that may result in more expenses than earnings in the long run. 

If you want to avoid making this costly mistake, it is essential to learn the art of looking for the right credit card. 

Beyond Rewards: How to Choose the Best Credit Card

If you want to find the perfect credit card for long-term use, it may be tempting to look at just the rewards offered by different credit cards in the market. However, while rewards are certainly important, they are not the only aspect that you need to look at. 

To learn how to choose the best credit card for your long-term use, there are also many other factors to consider. Looking closely at only the rewards prevents you from accounting for other benefits. Often, this may result in credit card expenses overshadowing the rewards in the long run, making it a disadvantageous proposition.

5+ Factors to Consider While Choosing the Right Credit Card

1. The Fee Structure

Check if the annual fee is affordable because you need to pay it each year. Even if this fee can be waived, you may not be able to claim the benefit if you are not a high spender — in which case a lifetime-free credit card may be a better option.

2. Purchase Protection and Extended Warranties

Some credit cards offer purchase protection and extended warranties on the products you buy using the card. These benefits imply that the items you purchase are insured in case they are damaged, lost or stolen.

3. Reward-Spending Alignment 

In addition to evaluating the rewards on your credit card, you must also check how well the rewards align with your spending patterns. For instance, if you are a frequent traveller, a credit card that offers air miles and other travel benefits may be more valuable for you than a card that offers lifestyle-oriented rewards. 

4. Redemption Options

Some credit cards may come with limited redemption options and restrictions on the time limit within which you can redeem your rewards. If these restrictions are too stringent, it may become difficult for you to optimally make use of the rewards you’ve earned. This, in turn, brings down the overall value-add of the card in the long run. 

5. Additional Benefits to the Cardholder

Aside from spend-based rewards, some of the best credit cards also offer other benefits to the cardholder. They may include concierge services, travel insurance, accidental insurance, complimentary lounge access and even memberships in VIP or premium programs.

In Conclusion

There is much more to finding a good credit card than simply checking out the rewards offered. And now that you know how to choose the best credit card for long-term use, you may find that the 5% Card from Fi Money may be a good option to consider. 

Make the Wise Choice with Fi

If you're looking for a credit card that gives you the best bang for your buck, the Fi-Federal co-branded credit card is what you need. With this card, you're assured of a 2% valueback through rewards. But that's not all, as you'll also get 5x on your top 3 brands, 2x on all partner brands listed in the Fi Catalogue (including Amazon, Netflix, etc.) and 1x on everything else, including rent and fuel. What's unique is that you earn points through Fi-Coins. For travellers, the perks are even better, as you can convert your Fi-Coins to airline miles or cashback.

Frequently Asked Questions 

1. What factors should I consider when choosing a credit card for long-term use?

To find the perfect credit card for long-term use, you need to consider different factors like the interest rates, the fee structure, the credit limit and any other benefits offered to cardholders. 

2. Are rewards the only important aspect to consider when selecting a credit card?

No, rewards are not the only important aspect to consider when you are choosing a credit card for the long term. Other key factors that you need to compare and account for include the fee structure, the card issuer’s reputation and the customer support they offer. 

3. How do annual fees impact the suitability of a credit card?

Annual fees are charged each year. If the annual fee on your credit card is high, and you do not use your card frequently, it may become tough to justify paying high fees each year over the long term. In that case, a lifetime free credit card may be a more suitable option. 

4. What are the disadvantages of focusing solely on rewards when choosing a credit card?

If you focus only on the rewards when selecting a credit card, you may end up paying high fees or suffer from other drawbacks like limited reward redemption options, complex reward programs and poor customer support. 

5. Are there specific features or benefits that I should prioritise over rewards when evaluating credit card options for long-term use?

While it is extremely important to consider rewards when you are choosing a credit card for long-term use, there are also other features you need to evaluate and prioritise. They include affordable interest rates, minimal fees, achievable fee waiver limits and credit cardholder benefits.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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