13 Things to Check Before Choosing a Credit Card

Choosing the right credit card in India can feel confusing because there are hundreds of options from major banks like HDFC Bank, SBI, ICICI Bank, Axis Bank, Kotak, IndusInd, and more. Each card comes with different fees, benefits, reward systems, eligibility rules, and hidden charges.

If you are a first-time credit card user or planning to upgrade to a better card, understanding how to choose the right credit card is essential. A credit card can either become your best financial tool—or a trap—depending on what you choose.

This detailed, beginner-friendly and SEO-optimized guide will help you understand how to pick the best credit card based on your lifestyle, spending habits, and financial goals. You will also learn how to choose your first credit card if you are new to credit.

Let’s dive in.

Table of Contents

1. Credit Score Requirement — The First Step in Choosing the Right Credit Card

When thinking about how to choose the right credit card, your credit score is the most important factor. In India, credit scores are mainly checked through CIBIL, and banks prefer applicants with a score of 750 or higher.

Why your credit score matters:

It determines whether your credit card application will be approved
It influences the credit limit banks offer
A higher score means access to premium cards
Better scores help you negotiate interest rates and benefits

Credit Card Options Based on Score

CIBIL 750+: Eligible for premium cards (travel, cashback, rewards, lifestyle)
CIBIL 650–749: Eligible for entry-level and mid-range cards
Below 650 / No score: Go for secured credit cards (against Fixed Deposit)

If you’re wondering how to choose your first credit card with no credit history, start with:
✔ Secured card
✔ Zero annual fee card
✔ Basic cashback card

This helps you build your CIBIL score safely.

2. Interest Rates — A Key Factor in How to Pick the Best Credit Card

Interest rate is the cost you pay if you don’t pay your credit card bill on time.
Most Indian credit cards charge 30–42% interest annually, which is one of the highest among financial products.

When evaluating how to pick the best credit card, always check:

Monthly interest rate (Avg: 2.5–3.6%)
Interest-free days (Usually 45–55 days)
Penalties on late payments

Why Interest Rate Matters

If you plan to carry a balance, a card with a lower interest rate is more important than rewards.
Example: Paying only minimum due can trap you in debt quickly.

Tip: If you’re learning how to choose the right credit card, avoid cards that have extremely high monthly interest unless the benefits justify it.

3. Annual Fee — Decide If the Card Is Worth It

Every credit card has a fee structure:

Lifetime Free (LTF) Cards: No annual fee
Low Annual Fee Cards: ₹199–₹999
Premium Cards: ₹2,500–₹10,000+
Super-Premium Cards: ₹20,000–₹1,00,000

Before deciding how to pick the best credit card, ask yourself:
→ Will the benefits (cashback, miles, lounge access, vouchers) cover the annual fee?

Fee Waiver

Most Indian banks waive the annual fee if you spend a certain amount in a year.
Example: Spend ₹1 lakh a year → Fee waived.

This is helpful if you’re thinking how to choose your first credit card without high costs.

4. Credit Limit — Important for Safety, Convenience & Credit Score

Your credit limit is the maximum amount you can spend on your card.

Higher credit limit =
✔ Better credit score (due to low utilization)
✔ More financial flexibility
✔ Easier travel bookings and online purchases

But many beginners make the mistake of choosing cards with very low limits.

What to Expect

New users: ₹20,000 – ₹1,00,000
Stable income: ₹1,00,000 – ₹3,00,000
High income: ₹3,00,000 – ₹10,00,000+

Understanding this helps you learn how to choose the right credit card based on your income.

5. Analyze Your Current Spending — The Most Important Step

When learning how to pick best credit card, one golden rule is:

Pick a credit card based on where you spend the most money.

Here’s how you can analyze your spending:

Check your phone’s expense tracker
Review bank statements of last 3 months
Identify top 3 spending categories

Spending Categories (India-Specific)

Online shopping (Amazon, Flipkart, Myntra)
Travel (flights, hotels, fuel)
Groceries
Utilities (mobile bills, electricity, DTH, Wi-Fi)
Dining
Entertainment
Fuel (daily commute)

Match Card to Your Spending

Big online shopper → Amazon ICICI / Flipkart Axis
Traveller → HDFC Regalia / SBI Vistara / Axis Atlas
Fuel expenses → BPCL SBI / HPCL ICICI
Dining → RBL Zomato Edition
Groceries → Cashback cards like Axis Ace

If you understand your spending, choosing the right credit card becomes easy.

6. Charges — Hidden Costs Every Indian Should Know

Before deciding how to choose your first credit card, it’s important to understand all charges involved.

Common Credit Card Charges

✔ Late Payment Charges (₹200–₹1,300)
✔ Cash Withdrawal Fee (2.5% to 3%)
✔ Finance Charges (up to 42% APR)
✔ Over-limit Fee
✔ Foreign Transaction Fee (1.75–3.5%)
✔ Card Replacement Fee
✔ EMI Processing Fee

Many people only look at rewards without checking these hidden charges.

To truly know how to pick best credit card, ensure the charges match your usage pattern.

7. Choose a Card and Apply — The Application Stage

After comparing all features, it’s time to apply. But choosing where to apply is equally important.

Where to Apply?

Official bank website
Bank branch (ideal for new users)
Trusted financial portals
Pre-approved offers from your bank

Requirements

PAN Card
Aadhaar Card
Salary slips or ITR
Bank statements

Banks also analyse your credit behavior, job stability, and income type as part of how to choose the right credit card applicant profile.

8. Rewards — Earn Points on Every Spend

Rewards are the backbone of most Indian credit cards.

Types of Rewards:

Reward points
Accelerated rewards (10X, 5X points)
Welcome bonus
Milestone bonus

Useful for:
✔ Travel
✔ Shopping
✔ Vouchers
✔ Luxury perks

If you’re learning how to pick the best credit card, choose a card whose reward system matches your lifestyle.

9. APR (Annual Percentage Rate)

APR is the total annual cost of borrowing money on your card.
It includes:

Interest
Finance charges
Some processing costs

A lower APR saves more money if you ever miss a payment.

Understanding APR helps you decide how to choose the right credit card for long-term use.

10. Cashback — Simple & Effective for Indian Users

Cashback is the most preferred benefit in India.

Best Cashback Scenarios:

Utility bills
Mobile/DTH recharge
Online shopping
UPI payments (on select cards)
Dining

Examples:

Axis Ace (5% cashback on bills)
SBI Cashback
ICICI Amazon Card

If your priority is simple savings, cashback cards are the easiest option in how to pick best credit card.

11. Identify Your Goals — Why Do You Need a Credit Card?

Before choosing any card, list your goals:

Do you want to save money?
Do you travel often?
Need lounge access?
Want to build credit score?
Want to earn cashback?
Want brand-specific discounts?

Matching your goal with the right card is key to how to choose the right credit card for your lifestyle.

12. Loyalty Programs — Extra Benefits for Regular Users

Many premium and travel cards offer loyalty programs like:

Free lounge access
Hotel memberships
Reward tier upgrades
Exclusive partner discounts
Priority customer service

If you are someone who travels or shops frequently, loyalty perks can give long-term value.

13. Understand the Different Card Types — Essential for First-Time Users

To understand how to choose your first credit card, you must know all types of credit cards available in India:

1. Cashback Credit Cards

Great for savings on daily expenses.

2. Rewards Credit Cards

Good for earning points which can be redeemed later.

3. Travel Credit Cards

Offer miles, free lounges, hotel benefits.

4. Fuel Credit Cards

Help save on rising petrol/diesel prices.

5. Co-branded Cards

Best for brand loyalists (Amazon, Flipkart, Indigo, Tata Neu).

6. Secured Credit Cards

Perfect for beginners with no credit history.

Choosing the right type ensures you get the maximum value and avoid paying for benefits you don’t use.

Conclusion

Understanding how to choose the right credit card becomes easier when you consider your income, credit score, spending pattern, goals, charges, and reward structure. Every credit card is designed for a specific lifestyle, so the key is to match the card with your daily needs.

Whether you are looking for how to pick the best credit card or how to choose your first credit card, remember:

✔ Choose a card based on your spending categories
✔ Compare fees vs rewards
✔ Never ignore hidden charges
✔ Aim for the card that provides maximum savings and benefits

A good credit card isn’t the most expensive one—it’s the one that saves you the most money.

FAQs: How to Choose the Right Credit Card in India

1. What is the best credit card for beginners in India?

Beginners should choose lifetime free, secured, or basic cashback cards like ICICI Amazon Pay or SBI SimplyClick.

2. How do I choose the right credit card if I have no credit score?

Go for a secured credit card against a Fixed Deposit (FD). It helps you build credit quickly.

3. Is cashback better than reward points?

For everyday users, cashback is simpler and more valuable. Rewards are better for frequent shoppers and travellers.

4. What credit score do I need for approval?

Banks usually prefer CIBIL 750+, but some cards work even with lower scores.

5. Can I have more than one credit card?

Yes, having 2–3 cards is normal and helps maximize rewards.