PICK AND SAVE

WITH CREDIT CARDS BECOMING INCREASINGLY COMMON, PICKING THE RIGHT ONE IS PARAMOUNT FOR MANAGING YOUR FINANCES EFFECTIVELY, AND ULTIMATELY ENHANCING YOUR FINANCIAL HEALTH

- NAVNEET DUBEY

ONE FINE DAY, Aradhana Taneja, a 31-year-old IT professional passionate about travel was walking into a bustling shopping mall in Noida when a credit card sales executive from a well-known credit card provider approached her. Though initially uninterested in hearing about the benefits of the card, two perks grabbed her attention. Firstly, the sales rep said the card required no joining fee; and secondly, the card awarded 3x reward points for each domestic premium economy air ticket purchased using it. Plus, he said, she would also receive generous rewards for every purchase she made in shopping malls. Intrigued by the seemingly cost-free proposition, Taneja decided to go for it.

Fast forward a year, and Taneja was shocked to be charged ₹3,000 as annual fee. Then it dawned on her that the credit card was not, in fact, free for lifetime. After scrutinising the terms and conditions of the card, she discovered that the card was less beneficial than what she’d been told. She would have to make several mandatory purchases in order to avail the annual fee waiver.

Her case is not unique. Anecdotal evidence suggests that such instances are quite common. And all of them serve as good examples of what can happen when you don’t evaluate your options thoroughly before making a financial decision. It also underscores the importance of choosing the right credit card based on your needs and circumstances. Thus, you should evaluate the potential risks, and costs and benefits of any card before signing up. Careful consideration can protect you from unpleasant surprises, and help you maximise your benefits.