If you’re a millennial in Sri Lanka, you can’t be using the same credit card that your dad uses! Your needs are super different from someone who represents the previous generation.
First things first. How do you know if you’re a millennial? It’s simple. If you’re born from 1981 to 1996 (ages between 23 to 38 in 2019), you’re a millennial (according to Pew Research).
Millennials are a different bunch than any other generation out there and there’s a good reason for that. For starters, millennials go out more than their parents (isn’t this obvious!) and they are all about dining, traveling and having fun. That’s why you need to select a credit card that suits your lifestyle. Not your dad!
If you’re a millennial, in this post you’re going to learn everything you need to consider before selecting a credit card in Sri Lanka.
Things to consider when selecting your first credit card
Whether you’re a millennial or not, there are certain things that are applicable to all credit cards. First, let’s understand what those are.
This is something that a bank charges when you sign up for their credit card. Most banks wave off the joining fee but there are some banks who charge this. Find a credit card that doesn’t have a joining fee.
The annual fee is something that you pay for your bank each year for using your credit card. That’s how your credit card company makes money. Whether you use your card or not, you still have to pay the annual fee.
Most millennials are still in the entry level of making money. So make sure to get a credit card which has a lower annual fee. Most credit cards in Sri Lanka wave off the first annual fee. They offer the card for free. But don’t get too excited and sign up! Ask what the annual fee will be after the first year. If you’re not comfortable paying the required annual fee, find a card you’re comfortable with.
When you purchase something from your credit card, there’s a period to settle that amount. If you don’t settle that within the period, they are going to charge interest on your balance. That’s how your bank makes money. You need to find a credit card that has a low-interest fee. How do you do that? You need to compare it with other credit cards. The current market rate is about 28% annually.
Late payment fees
When you don’t settle the balance in your card before the due date, they will charge you a late payment fee. Keep in mind that this will be charged separately from the interest. Different banks charge different amounts. But if you’re willing to settle the amount on time, you don’t have to worry about this.
Those are the fundamentals to consider when applying for any credit card. Now to the good stuff.
Here’s what millennials should focus on
If you’re a millennial, you can’t just get the same credit card as everybody else does. It might not be the best choice for you. You need to look at your individual needs to figure out what the best option is.
Most millennials love to dine and wine! If you’re a person who eats out at least once or twice every week, you need a credit card that offers great restaurant deals. You might think getting a 10% off once or twice a week is not a big deal but if you’re a regularly eating out, this can be a huge saving.
Retail and online shoppers
If you’re into fashion and shopping, your needs are different. You need to find a card that offers great deals and discounts on retail and shopping.
If you’ve visited any e-commerce website in Sri Lanka, they have credit card offers every day! Online retailing is a great way to save big with your credit cards. Look at the top e-commerce sites in Sri Lanka and identify which cards have the most offers.
Millennials love to travel. Are you the kind of person who loves traveling and getaways? Then you need a credit card that offers great local and foreign travel benefits. How do you find them? Simply check out all the travel and holiday deals in each credit card.
Gas and groceries
Millennials range from age 23-38. What if you’re an old millennial? What if you’re married and have a household to run? That doesn’t mean that you can’t make use of your credit cards. There are credit cards that offer great discounts for grocery shopping and fuel. Some credit cards have partnered with supermarkets to offer deals on every bill you pay with your credit card. It’s a matter of doing some digging to find out the best credit card for grocery shopping and fuel.
Cashback and Reward points
What if you’re a simple millennial who doesn’t eat out or go on holidays? Still, you can benefit from a credit card. There are credit cards that offer Cashback for every transaction you do. Imagine if you are a person who pays all your bills using a credit card? With Cashback, you’re going to receive a percentage of cash for every transaction. This can be a great saving for each month. HSBC Platinum Cashback card is one of them.
Reward points are another way to benefit from your credit card. For every transaction you do, there are credit cards that offer reward points.
Those are the things you need to consider before selecting your first credit card. So how do you find the best card?
It’s not difficult to find a credit card that matches your needs
First, identify what your needs are. Then consider the fundamentals that are applied for every credit card. After that, you can start your research. Visit the websites of each and every credit card to find the best fit for you. Once you do, call them and confirm those benefits. Sometimes what you see on the surface may not be their offering. Then apply.
Pay your bills on time and in full – No. 1 rule
Even though credit cards are a great financial tool, you shouldn’t forget the cardinal rule of credit cards. You need to pay your bills on time and in full. If you’re not careful about the interest, it can cause a snowball effect. Don’t ever purchase something if you don’t have the means to pay it before the due date. Otherwise, any benefit you will get from your credit card will be gone with the monthly interest you pay.
One of the things I do is have a reminder each month before the due date. That way, I will always make the payment on time. No interest and no late payment fees.
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