Are you looking to get a new credit card? Ready to take the next step in your financial journey? Read on for five considerations you should make before choosing the best credit card in the UAE.
1. The Type of Credit Card
First and foremost, you need to know what kind of credit card is going to work best for you. Generally, there are three types of credit cards that you can choose from:
- Credit cards that will help you improve your credit
- Credit cards that allow you to save money on interest
- Credit cards that earn you rewards
Learning the difference between these types of credit cards and understanding how you want to use your card are the first steps in choosing the right one.
Today, you can find a wide range of credit cards with features that are designed to meet particular needs and to suit specific lifestyles. In order to get the most out of your credit card, it is crucial that you find one that aligns with your financial goals and lifestyle spending. For example, if you travel frequently, then you are going to want a credit card that rewards you for travel spending.
2. The Annual Percentage Rate (APR)
One of the most significant considerations you need to make before choosing a credit card is related to its Annual Percentage Rate (APR), the interest rate you will pay on the amount you owe while having a balance on your card. If you don’t pay your balance in full by the monthly due date, then you are going to accrue interest which can quickly add up. Therefore, you may want to look for a credit card that offers a lower introductory APR.
When looking at low-interest or 0% APR cards, you want to make sure you are asking how long the low-interest period lasts and whether it is long enough to give you a chance to pay off your debt. Similarly, it is vital to learn more about the card’s balance transfer policy if you are planning on transferring debt to a low-interest card.
On the other hand, if you pay off your balance in full each month, then you may not be concerned about a high APR, which means that a rewards credit card could be the appropriate choice for you. While this type of card usually has a higher APR than other options, they also offer more massive sign-up bonuses and give you points, miles or cashback with every purchase you make.
3. The Credit Limit
When it comes to choosing a new credit card, you want to ensure you are selecting one that has the ideal credit limit for you. That amount will be different for everyone. However, you want to ensure that you are choosing one that has a large enough credit limit to provide you with the flexibility you need, but not too large that you are going to spend beyond your means and get into credit card debt.
If this is your first time to get a credit card, it is recommended that you start with a low-limit card that you can utilise while learning how to use credit to your benefit. As you get more comfortable with your budgeting skills, you can begin to increase the limit, which will allow for more considerable monthly expenses. Keep in mind that over time, you want to raise your credit limit because you want to keep your spending to a low percentage of your overall credit limit.
Ultimately, only you can know what the right credit limit for you is. If you are worried about being responsible with your credit, make sure you don’t select a credit card that is going to enable you to take on more debt than you can afford.
4. The Rewards
For many individuals, the credit card they use is based on the types of benefits that they can receive from the offered rewards programs. In many cases, the everyday purchases that you make earn you points, which can then be applied toward travel, retail purchases, and cashback.
That being said, the last thing you want to do is to be spending more just to rack up the rewards. Instead, you want to be obtaining rewards based on what you would already be purchasing. For this reason, it is crucial that you select a card that provides you with rewards that make the most sense for your everyday spending and that gives you rewards for where you spend the most.
To find out which credit card is going to provide you with the most beneficial rewards, take some time to read reviews about the different rewards programs.
For example, the CBD Smiles Visa Signature Card offers up to three points for international expenditures, up to two points for domestic spending, and 10 points when you shop at Etisalat or the Smiles UAE mobile app. Alternatively, the Super Saver Signature earns you up to 10% cashback on everyday retail spend categories, making it a better choice for those who don’t usually use their card for travel points but instead for home essentials and groceries.
5. The Other Benefits
In addition to rewards for spending, individual credit cards also offer additional benefits such as lounge access at airports, concierge services, and unique partnerships with brands. Therefore, when looking at potential credit cards, make sure you are contemplating what benefits are important to you and which you are likely to use.
For example, the CBD Smiles Visa Platinum Card offers a 50% discount on VOX cinema tickets and Buy 1 Get 1 Free dining and lifestyle offers. In contrast, the World Mastercard offers Airport Lounge Access, complimentary access to Pharaoh’s Wafi Club, and other travel benefits.
Again, the key to choosing the right option for you is to see which benefits align with your current spending habits and your lifestyle. Your next credit card should work just as hard to improve your life as you do. Reach out to the top bank in Dubai today to learn more about your options in this next financial step.
What do you think are the most important considerations to make before choosing a new credit card in the UAE? How do you like to utilise credit cards to achieve your financial goals? What are you looking for in your next credit card? Let us know your thoughts and insights in the comments below.
