A credit card is a very convenient financial tool, but it comes with the risk of hurting you if you don’t respect its powers when it comes to spending. When zeroing in on a credit card, ask yourself what will you be using the card for? If you are going to use it for most of your financial transactions, evaluate if you will have the repaying capacity when the payment is due each month.

Next, look for a card with the lowest charges—these could be by way of annual fee, late fee and interest charges when applicable.

If you frequently use your card to refuel or buy airline tickets, look for a co-branded card to derive additional benefits. Most importantly, check the credit limits you are entitled to and make sure at no time this limit is so high that you get into a situation where you are unable to repay. As most cards come with incentives by way of reward points, do check what is on offer and how you can benefit from it before zeroing in on a credit card.

OlmDesk@outlookindia.com