Choose a card that suits your personality

Nov 19 2012, 10:03 IST
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You have to pay back at the end of the free credit period but our impulse shopping instincts sometimes does not listen.  (Reuters) You have to pay back at the end of the free credit period but our impulse shopping instincts sometimes does not listen. (Reuters)
SummaryWhen we talk about credit card usage we find different people managing it in a different way

When we talk about credit card usage we find different people managing it in a different way.

Some people are highly disciplined and never default on their payments and others are so messy that they are always on the top of the defaulters list. A credit card provides you a certain degree of freedom and this should not be misconstrued as limitless.

You have to pay back at the end of the free credit period but our impulse shopping instincts sometimes does not listen. To avoid getting into trouble in future it is advisable to understand your credit personality and choose the credit card, which suits you the best.

Let’s figure out the kinds of credit personalities that exist and what card they should typically opt for.

The Beginner

You are just out of college in your first job. You never had surplus cash before and hence no financial planning was required. You have never utilised credit previously and you are very taken up with the concept of a credit card. As expected, you are in a hurry to apply for one.

For beginners it’s advisable not to go for cards with a high credit limit. Your financial wit has never been tested so better be cautious. This is just the beginning and once you are sure that you can manage your finances well, you can go for credit cards with a higher credit limit.

Example: All banks will provide you with credit cards with low credit limits.

Disciplined Scrooge

You have been there and done that. You are great at financial planning and almost everything is in perfect shape. You never default on your payments and never spend beyond your means. Reward offers don’t alter your spending pattern and you plan every move before executing.

For you, the best suited card is one with cash back facility and a good reward structure. The reward points should accrue irrespective of the type of purchasing done and can be redeemed at one go. Interest rate on your card doesn’t matter much as you always pay on time.

Example: Citibank Cash Back Card (Assured cash back every time you swipe your card), ICICI Bank Credit Card associated with various vendors like Big Bazaar, SBI Silver Card.

The Carefree

You love spending and believe it to be the motivation for earning. You plan things beforehand but don’t mind going overboard at times. You cross your spending limit at times and

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