How to choose the right credit card | عنوان الحلقة: كيفية اختيار بطاقة الائتمان المناسبة

[00:00:02] Hi, welcome back to the Policy Project brought to you by Policybazaar.ae and your host Chagu.

[00:00:07] And today we're going to look at the story of Shristi Thikshit.

[00:00:11] Now Shristi, she's a 25 year old girl. She's always been fascinated by the grandeur of Dubai.

[00:00:17] Now her dream of living in the UAE in this lavish city of Dubai finally came true

[00:00:24] when she landed a job as a receptionist in a five star hotel.

[00:00:28] The thing is, the reality of Dubai's high living cost quickly dawned on her.

[00:00:33] This happens to all of us. Her salary was barely enough to cover her rent, groceries and transportation

[00:00:38] after she was indulging in the city's posh lifestyle.

[00:00:42] Now Shristi's living conditions were far from luxurious.

[00:00:45] She shared a small apartment with three other girls who worked similar jobs.

[00:00:49] She missed the warmth and comfort of her family back in India.

[00:00:52] But because of her poor financial planning, she could not even afford to travel back to visit them.

[00:00:58] So she often felt lonely and disconnected in the new city.

[00:01:01] She struggled to keep up with her colleagues in the high flying expat community around her.

[00:01:05] She would often hear them talk about their fancy restaurants, weekend trips, luxury purchases,

[00:01:10] leaving her feeling left out and unworthy.

[00:01:13] Now despite her efforts to cut back on expenses, she felt like she was drowning in debt.

[00:01:17] She felt hopeless. She longed to escape her financial struggles and return to her family.

[00:01:23] But the reality was far from her dreams.

[00:01:26] So Shristi decided to get a credit card to finance her lavish lifestyle.

[00:01:32] Now the idea seemed great at the time.

[00:01:35] A lot of her friends had done the same thing and they all talked about how great their credit cards were.

[00:01:39] And Shristi had also heard that her credit card could greatly improve her credit score.

[00:01:44] So she went ahead and got one. But she made the mistake of not doing her research

[00:01:49] and ended up with a credit card that was not suitable for her needs.

[00:01:54] Shristi started using her card to pay for rent, her groceries, her entertainment going out.

[00:01:59] She was completely enjoying her new lifestyle until the bills started mounting up.

[00:02:04] She was simply unable to keep up with her payments and she soon found herself in a vicious cycle of debt.

[00:02:10] A credit score was affected and she was constantly worrying about how she would pay off her debts.

[00:02:15] She was now in a worse position than before.

[00:02:19] And on today's show, we're going to take up her case.

[00:02:21] We're going to use Shristi as a case study to figure out where things went wrong

[00:02:26] and how things can be improved.

[00:02:32] Hello and welcome to today's episode of the Policy Project by policybazaar.a.

[00:02:36] Now today, we're going to look at a topic that's super important

[00:02:39] and is no doubt relevant to a lot of you.

[00:02:42] We're going to talk about the importance of choosing the right credit card

[00:02:45] and to discuss this, we have Tina Malhotra with us.

[00:02:48] Now, Tina is the business head of partnerships and acquisitions financial services

[00:02:53] which includes credit cards and banking at policybazaar.a.

[00:02:56] She comes with rich experience of working in the UAE as well as India in media,

[00:03:02] in finance, in private offices in a lot of that.

[00:03:05] And of course now she's been taking care of things at policybazaar.a.

[00:03:08] Tina, welcome to the show. Thank you so much for doing this.

[00:03:11] Thanks for the introduction, Chadu. Pleasure connecting with you.

[00:03:14] Now tell us, Tina, we've seen this situation before, right?

[00:03:19] Some of us have even been in this situation to get a credit card bill

[00:03:21] and then you have to like hold your chest a little bit, heart attack happens.

[00:03:26] What do you think went wrong in this particular situation?

[00:03:29] In Shristi's case?

[00:03:31] In her case specifically which I can gauge as your overall situation is

[00:03:36] she didn't do her financial plan.

[00:03:40] She should have done her monthly financial planning and you know,

[00:03:43] assessed her budgets in terms of what is her kind of salary,

[00:03:47] what is the kind of expenses she needs to incur

[00:03:49] and she would have categorized her expenses as well

[00:03:53] suiting her lifestyle and requirements.

[00:03:56] Now she started spending above her means

[00:03:58] which is obviously above her salary and you know

[00:04:02] that actually clocked her expenses

[00:04:04] whether it was a lifestyle expense or whether it was a utility expense

[00:04:08] or any kind of expense.

[00:04:10] Plus secondly, she couldn't afford making the entire outstanding payments on time.

[00:04:15] So hence she started making the minimum payments on a monthly basis

[00:04:19] and thereafter because of that

[00:04:21] she didn't realize her interest rates on the credit card

[00:04:25] because when you make the minimum payment

[00:04:27] you clog up interest rates as well.

[00:04:29] So I don't think so.

[00:04:30] She would have read the terms and conditions very well

[00:04:33] while you know applying for the credit card

[00:04:36] and eventually the overall outstanding which was there

[00:04:40] started impacting her credit bureau score.

[00:04:43] So in that case, you know, she was basically

[00:04:46] you know just filing upon our outstanding

[00:04:50] you know, she was succumbing to the kind of expenses she was doing

[00:04:53] and overall her bureau history was getting impacted.

[00:04:57] So this is the kind of situation she is in.

[00:05:00] So you know, you've laid it out perfectly

[00:05:02] and literally when you've laid it out step by step

[00:05:05] I'm seeing almost a domino effect.

[00:05:07] Yeah.

[00:05:09] Now, what do we to take away from this?

[00:05:12] What are the lessons that we ought to learn in this kind of situation?

[00:05:16] It can't just be interest rates of credit cards are very high.

[00:05:19] I mean there's this clearly more learning to be had here.

[00:05:23] Absolutely.

[00:05:24] So you know consumers need to understand that a credit card

[00:05:28] is a means of ease of payment and convenience.

[00:05:31] So it is very imperative for a consumer to plan their finances.

[00:05:36] So here like I mentioned in my previous response, financial planning is a must

[00:05:42] and not spending above your means is again very imperative.

[00:05:46] So it's important to understand your budgets monthly spends

[00:05:50] your monthly salaries and accordingly choose the right credit card

[00:05:53] that will suit your requirements and daily needs as well.

[00:05:57] So that is very important as a part of your lifestyle.

[00:06:00] You know, you hit the nail on the head when you said right credit card.

[00:06:03] A credit card is well of course it's a convenience and sometimes

[00:06:06] you simply can't do without it.

[00:06:08] Lessor and lesser people are transacting in cash but it's also an element

[00:06:13] of financial planning right and we tend to ignore it.

[00:06:17] We tend to look at income and then look at financial planning how

[00:06:20] to save how to do this, how to do that.

[00:06:22] But the expenses is something that's equally important

[00:06:25] and a credit card is a large part of that.

[00:06:27] So how do you even choose the right credit card?

[00:06:29] So here, you know a credit card choosing is an individual base.

[00:06:33] So you know it is completely dependent on the kind of features

[00:06:37] and benefits that's suiting their lifestyle and daily requirements also.

[00:06:42] So if you were to look at the pool of credit cards, features

[00:06:45] and benefits which all the banks offer in the UAE they come up

[00:06:49] with the fantastic offers rewards loyalty points, air miles.

[00:06:55] So that can be classified into various different buckets.

[00:06:58] So I would just give you a little brief in terms of you know

[00:07:01] what are these features and benefits and how do you choose

[00:07:04] these features and benefits.

[00:07:05] Absolutely.

[00:07:06] So first pocket obviously is a cash back credit card

[00:07:10] which is the most important credit card which everybody looks

[00:07:13] at in today's scenario.

[00:07:14] So everybody is looking at you know, looking at cash pack

[00:07:18] earning cash pack, earning points, miles on every purchase

[00:07:22] they are doing.

[00:07:23] So you know a cash pack is a you know, a means of you know

[00:07:28] you a bank pays you a percentage of what do you spend?

[00:07:32] You know, which is called a cash back or they give you reward

[00:07:36] points instead of a pure play cash back.

[00:07:39] So besides that, you know, there are rewards credit cards

[00:07:42] as well.

[00:07:44] So a reward credit card you can earn cash back points

[00:07:47] or miles on every purchase.

[00:07:49] So that is classified as a reward credit card and you can

[00:07:53] redeem these rewards in the form of your for example,

[00:07:56] if you need a travel credit card then you can redeem

[00:07:59] these rewards in the form of travel bookings.

[00:08:02] You can redeem these rewards in terms of the statement

[00:08:04] credits on our monthly basis, which is a cash back comes

[00:08:07] to your statements and on entire shopping credits

[00:08:11] as well.

[00:08:12] So many cash back and reward credit cards don't charge

[00:08:15] an annual fee, which is like a free for life.

[00:08:18] I don't want to pay those.

[00:08:19] I do see consumers in today's absolutely, absolutely.

[00:08:23] So banks obviously give you options of waving off the

[00:08:27] annual fee completely for the entire life or they give

[00:08:31] you an option of first, you know, annual fee waver

[00:08:34] in the first year and then basis your spend levels.

[00:08:38] They start waving off from the second year as well.

[00:08:40] Got it.

[00:08:41] And these kind of credit cards offer you entertainment

[00:08:44] and dining discounts as well.

[00:08:46] So entertainment can be further classified into, you know,

[00:08:49] whether you're looking at movie tickets, you know,

[00:08:51] entertainment benefits are wailing on amusement parks

[00:08:55] and dining discounts of course, you know, ordering

[00:08:58] through your e-commerce platforms or in dining restaurants

[00:09:02] as well.

[00:09:03] So the third bucket which is obviously, you know,

[00:09:05] related to travel is the air miles credit card.

[00:09:09] So travel credit cards offer reward points when making

[00:09:13] travel and dining purchases.

[00:09:15] The extra reward points you earn from either a general

[00:09:18] or hotel or an airline credit card can accumulate quickly

[00:09:23] and can be used towards your plane tickets, hotel rooms,

[00:09:27] you know, all sorts of bookings which you do for

[00:09:30] your accommodations in hotels.

[00:09:32] And plus, you know, these travel cards give you

[00:09:34] access to your lounges as well worldwide and the

[00:09:38] airport transfers.

[00:09:39] There are no.

[00:09:40] So these are the key buckets wherein, you know,

[00:09:43] the customer should look at, you know,

[00:09:45] suiting their lifestyle, what kind of credit card

[00:09:48] they can, you know, avail from these buckets and, you know,

[00:09:51] they can avail these offers and benefits as well.

[00:09:54] So Tina, just to paraphrase, you said the three

[00:09:56] buckets that we're looking at are cashback.

[00:09:59] We're looking at rewards points.

[00:10:01] We're looking also at air miles.

[00:10:04] Aside from that, there's the discounts that each

[00:10:06] credit card or each bank will sort of have based on

[00:10:09] their time.

[00:10:10] Now, you know, you've consolidated this for us,

[00:10:13] but I'll tell you this when I was talking to you about

[00:10:15] this.

[00:10:15] The first thing that came to my mind that I'm driving

[00:10:17] down Shakespeare Road doesn't matter which emeryt,

[00:10:20] I mean, I will see ads for a credit card so and

[00:10:25] so cashback, so and so rewards, so and so best

[00:10:29] rewards program.

[00:10:30] And then it registers and then I see another ad

[00:10:34] when the time actually comes for me to look for

[00:10:36] another credit card or a brand new credit card,

[00:10:39] depending on how long I've been in the UAE.

[00:10:41] Now I'm stuck.

[00:10:42] Where do I get this consolidated information?

[00:10:45] Because even with banks, the offers keep changing,

[00:10:47] right?

[00:10:47] Not only do I want consolidation, I also want

[00:10:49] up-nation.

[00:10:50] Where do I go for this?

[00:10:52] So I would obviously like to tell my consumers

[00:10:55] and partners that they should look at policy

[00:10:57] bazaar.ae, which is a complete marketplace for

[00:11:01] comparison of credit cards or any other financial

[00:11:05] or banking products.

[00:11:07] So here in we've created a marketplace platform for

[00:11:10] comparing from a comprehensive list of banks that

[00:11:14] offer a pool of features and benefits with the

[00:11:16] latest offers.

[00:11:18] So these offers get updated on a timely basis,

[00:11:21] according to the bank and according to the card

[00:11:23] as well.

[00:11:25] And you know, the biggest advantage is that,

[00:11:27] you know, we offer expert advice in terms of

[00:11:30] choosing the right kind of credit card as per

[00:11:32] their salary, as per their requirement, as per

[00:11:36] their overall lifestyle as well.

[00:11:39] So here in the customer can choose the right credit

[00:11:41] card, basis, the features and benefits, annual fee,

[00:11:44] interest charges and of course the salary as well.

[00:11:48] So our experts guide the customers in choosing

[00:11:51] the card and you know, in fact, they assist

[00:11:55] the customer on how to apply for the cart at

[00:11:58] every step through the bank's digital journeys.

[00:12:01] So today every bank has gone digital 100%,

[00:12:05] wherein you know, you can upload your KYC,

[00:12:07] which is your Emirates ID, your passport, visa

[00:12:11] and your employment details.

[00:12:13] So here we give you expert advice in terms of

[00:12:16] applying for the credit card through that digital

[00:12:18] journey application.

[00:12:20] So it's a complete marketplace of comparison of

[00:12:23] credit cards, giving you complete details of

[00:12:26] features and benefits, interest, annual fee,

[00:12:29] what kind of latest offers are there,

[00:12:31] what kind of cash back rewards you're earning.

[00:12:34] Plus assisting them in terms of applying for the

[00:12:36] card for that particular bank as well.

[00:12:40] So that you know, the customer gets to know.

[00:12:42] You know, the huge advantage here is that,

[00:12:44] sure I'm on your website, I'm on the policypazar.ae

[00:12:48] website.

[00:12:49] I'm looking at a whole bunch of comparisons,

[00:12:51] but sometimes I might not know what's best for me

[00:12:54] or I might have a question or I might need to

[00:12:56] weigh one offer versus another offer.

[00:12:59] I think the advantage that we're talking about here

[00:13:00] is that I can actually talk to someone and discuss

[00:13:02] that with them.

[00:13:04] Absolutely.

[00:13:04] So it's a complete expert advice to the customer

[00:13:08] bases his needs, lifestyle requirements,

[00:13:12] the kind of salary the customer is earning,

[00:13:14] the kind of company the customer is working with

[00:13:17] so on and so forth.

[00:13:18] You know, I want to come back to who's situation

[00:13:22] we've been discussing.

[00:13:24] Sure.

[00:13:24] Assuming she had this kind of information,

[00:13:28] how do you think this would have helped her?

[00:13:30] Because if we're using her as a case study,

[00:13:33] how would this have solved her problem?

[00:13:35] So, you know, if she would have obviously looked at

[00:13:38] policypazar or an expert advice as well and if

[00:13:42] she would have chosen the right credit card in

[00:13:44] that scenario, then she would have paid lesser

[00:13:47] interest on a monthly basis would have received

[00:13:50] five or more benefits like loyalty points,

[00:13:53] rewards or cash back of that particular card

[00:13:56] and eventually would have made her timely

[00:13:58] outstanding payments as well on or before

[00:14:01] the due date and she would have reduced her outstanding

[00:14:05] balance and the credit card limit utilization as well,

[00:14:08] which she actually mounted in this scenario.

[00:14:11] And this overall thing would have helped her improvise

[00:14:14] a credit bureau score.

[00:14:15] So which is the most important thing in terms of

[00:14:18] assessing your credit history.

[00:14:20] Absolutely.

[00:14:20] Now, let me flip this question around.

[00:14:22] Okay.

[00:14:23] She's already now in this situation.

[00:14:26] She did not have the benefit of hindsight or

[00:14:29] the information that a policy bazaar would have been able

[00:14:32] to provide her given that she is now in this situation.

[00:14:36] Is it resolvable?

[00:14:38] Can policy bazaar advise her help her in how do we

[00:14:42] get out of this mess?

[00:14:43] Maybe another credit card, maybe some sort of debt

[00:14:45] reorganization with the bank that she's transacting

[00:14:48] with is that even possible in her case?

[00:14:51] So yeah, that is quite possible in that case that

[00:14:55] you know, we can give her expert advice.

[00:14:57] The biggest thing what she needs to do is she needs

[00:15:00] to connect with her existing bank financial advisor

[00:15:04] and explain her complete situation.

[00:15:07] And you know, the financial advisor can in turn

[00:15:09] can help a creator plan to pay off her debt of

[00:15:12] provide guidance in terms of how to avoid falling

[00:15:15] into similar situation in the future.

[00:15:18] So all that can happen.

[00:15:20] She has to reach out to the bank and if she's

[00:15:22] applied for the credit card through us, then possibly

[00:15:25] we can also give her an expert advice and connect

[00:15:27] with the bank as well.

[00:15:29] And can I assume that that very important credit

[00:15:32] score of hers could eventually improve if she had

[00:15:36] the right advice and basically followed through

[00:15:38] with discipline?

[00:15:39] Absolutely, absolutely.

[00:15:41] So if she had the right advice and discipline then

[00:15:44] and if she would have made the timely payments

[00:15:46] like I mentioned before as well on or before

[00:15:49] the due date and you know, if there was no

[00:15:52] delinquency, delinquency is basically you know, she

[00:15:54] wouldn't have defaulted on any payments or if she

[00:15:58] wouldn't have missed on any payments that definitely

[00:16:01] would have improvised her credit score in a big way.

[00:16:04] Absolutely good to know.

[00:16:05] Tina, thank you so much for all that insight.

[00:16:08] So thank you very much for that.

[00:16:09] Sure.

[00:16:10] Thanks for your time, Jagu pleasure connecting with

[00:16:13] Thank you for tuning into this episode of the

[00:16:15] Policy Project where we've highlighted the importance

[00:16:18] of financial planning and choosing the right

[00:16:20] credit card.

[00:16:21] We're hoping that our discussion with Tina has helped

[00:16:23] you gain insights of some value about how choosing

[00:16:27] the right credit card can save you a world of trouble.

[00:16:30] So the next time you're choosing a credit card,

[00:16:32] remember to compare all the offers on policypazard.ae

[00:16:36] and get expert advice.

[00:16:38] Now in our conversation, there were some key takeaways

[00:16:41] and just so that it registers again, we're going

[00:16:43] to go over them.

[00:16:44] One, choosing the right credit card is super important.

[00:16:48] It could make all the difference to your savings,

[00:16:50] to your credit score and your future prospects.

[00:16:53] The other thing is it's important to remember to

[00:16:56] spend within your means.

[00:16:58] A credit card can make buying things you love very,

[00:17:01] very easy but unchecked spending could have a

[00:17:04] long lasting impact.

[00:17:05] Choosing the right credit card can be tough due to

[00:17:08] all the various offers out there and they keep

[00:17:10] changing, right?

[00:17:11] New ones keep coming.

[00:17:12] So comparing credit cards on policypazard.ae

[00:17:15] and getting the right one based on your needs

[00:17:18] could help you actually reduce your expenses.

[00:17:20] Policypazard also has experts that can guide you

[00:17:23] through the process and help you apply for the

[00:17:25] right credit card.

[00:17:27] And remember, if you're struggling with credit

[00:17:29] card bills, all hope is not lost.

[00:17:32] You can connect with your bank or an expert who

[00:17:34] will help you manage your situation.

[00:17:36] And that about wraps it up for this episode of

[00:17:38] The Policy Project.

[00:17:39] I am Jagu and we'll be back with a lot more

[00:17:41] on finance and insurance in our forthcoming

[00:17:43] episodes.

[00:17:44] So remember to follow us and get notified about

[00:17:46] future episodes on your favorite podcast platform.