There are many reasons why you would need to use a credit card but when the time comes to selecting one, it is important that you choose one that suits your needs, However, selecting one can mean that you have to take in a lot of information including important figures and so, it helps to know what you need to look for. The following tips will ensure that you are informed to the point where you can make the right decision when choosing the best credit card offered by Pakistani Banks.
Consider the APR
Every credit card will have an annual percentage rate (APR) and this will show just how much you are being charged for credit, including the interest rate as well as any other monthly or annual fees. The rate is based around the purchase aspect and will not include the costs of cash withdrawals and bank transfers. The Pakistani regulatory bodies (State Bank of Pakistan) governs the way in which APR is worked out and that is why it is always advertised by the Banks.
In your case, it is worth comparing the different rates offered by banks such as Allied Bank, Faysal Bank, MCB, Silk Bank, Bank Alfalah, UBL, and Standard Chartered to name but a few. However, it is worth remembering that the rate can vary considerably between cards and the lower the APR the better the card usually is. Of course, you will need to understand how much it costs which could depend on how much the card will be used.
Keep an Eye Out For the Overall Cost
Things are not always as clear as they may seem because some card providers will change the interest rate based on your credit history and relationship with your bank. This is often the rate that they will advertise, so, if you have a poor credit history then you could be paying more. Also you should consider the overall cost of the card you are interested in. Such as a Representative APR (overall cost) may include all the costs associated with a card in addition to its interest rate.
Consider All the Fees
This is a simple tip but make sure that you compare all of the fees, tariffs and associated charges. This will include charges for any late payments you make, annual fee, chip maintenance fee and charges for exceeding your credit limit as well as returned payments or charges for cash withdrawals from your credit card.
Special Offers for Taking Out the Card
Credit cards are big business for banks and so, they will try to attract you in with introductory offers and reward programs. These offers often will remain in place for a fixed time such as 0% interest on purchases or balance transfers. A 0% card is a cheaper way of borrowing money but you have to make sure that your timing is right apart from some other ongoing offers such as discounts available for Taxi riding services such as ‘Careem’, Cashback on payments made through cards or discounts on dining in any specific restaurants etc. Always make sure you can clear the amount you owe before the introductory offer ends or you could transfer it to another card where you may get a new offer.
Balance Transfer Terms and Conditions
If you care considering a balance transfer which involves moving the debt to another card, then some banks will offer special rates for the transfers. However, you will need to be aware that you are likely to pay a percentage fee on the amount you transfer. You will also have to make minimum payments for the duration of the card and failure to meet these payments could lead to the offer ending. However certain cards may offer your 0% charges on balance transfers as introductory offers.
Special Benefits – Do You Really Need Them?
Several high-end cards may offer additional benefits such as travel insurance, cash back or air miles. While all of these are handy, you need to consider if you actually need them. So, as you can see, there are a number of reasons why you need compare the cards on offer and consider what you really need. The tips above have been designed to provide you with the information you need to make an informed decision.
Mawazna.com is a leading financial services comparison platform in Pakistan that enables consumers to make more informed decisions when choosing financial products and services including credit card comparison, selection and applying for a specific card product offered by leading card providers in Pakistan. Visit us online to compare banking, insurance (car insurance, travel insurance, and health insurance) and broadband products to make more informed decisions.
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