The content is accurate at the time of publication and is subject to change.

All credit cards offer benefits. Besides facilitating cashless transactions, they are easy to use, and can be carried easily. The chances of theft and misuse are the least in the case of credit cards. Cardholders have the freedom to travel around without carrying cash with them. The wide acceptance of the card also makes its use so popular. Having said all the above points, one must also mention that there are some penalties attached to the use of credit cards.

Credit cards if not used properly, can incur high interest rates and therefore become expensive. To overcome this negativity, companies look to promote the credit cards with a variety of offers.

Steps to be taken to choose the best credit cards

1. All credit companies` charges a annual fee for the use of their credit cards. These annual fees differ from company to company and can be negotiated. A credit card with higher annual fees will become a burden as there are other expenses related to the use of the card. A comparative account of all the annual fees should be taken before making a final decision.

2. The Annual percentage Rate or APR, is also a matter of concern for the users. The APR mainly depends on three factors;

• Loan or credit amount.

• Instalments paid.

• Bill cycle.

These factors are to be made clear by the credit card company before asking for a rebate.

3. The reward points and its type, helps in choosing the best card. The most popular rewards offered are cash back. Make sure of the amount of purchase that is to be made for a single reward point. There will be credit card companies promoting lower reward points for higher spending. Making a deal with such companies should be avoided.

4. The money spent through the credit card needs to get repaid within a given period. Failure to do so will incur additional charges.

5. Finally, a consumer must also look at the APR of a credit card. A credit card with low APR, annual fees and higher grace period will be of no value, if it cannot be used at the time of need.