1: Ask yourself how much budget do I have?

Most common mistake people make is buying the digital camera without buying a memory card. A memory card is like film in roll film cameras. Most cameras come with 16MB or 32MB of memory. However, that alone will not be enough to take decent amount of pictures. With a 3MP you may need a minimum 128MB memory card and with 4MP to 5MP ideally a 256MB or 512MB card would be better.

I get many people being very upset because they have scratched their newly bought camera because they didn't buy a camera case. If your digital camera and memory card cost you a total of $500-$600 why not spend an extra $30 or so to buy a camera case to protect your new investment.

However, if you want to save money, you don't have to buy a camera case. If you have an old camera case lying around why not put it to use. Anyway or the other, a camera case is essential.

2: Size of the camera does matter:

Once you have worked out how much you are willing to pay, the next thing is the physical size of the camera. Digital camera comes in various different sizes and colour. If you want to buy an ultra small compact camera i.e., Pentax Optio S5N and you have huge hands then you may want to reconsider.

Always consider the size of the camera relative to your hands. Ultra compact cameras may be very handy to carry around but if it’s hard for you hold to take photos then you won’t get nice pictures.

There is often a misconception that a 5MP or 6MP mega pixel digital camera is better than a 3MP camera. This is only true if you use a 5MP digital camera (set on the highest mega pixel and quality) and use photo editing software to crop the image and then print out to full size then you will notice the difference.

Basically, if you have a 3MP camera you can print out the photo to A4 size without picture distortion. If you use a 5MP digital camera you can print out to A3 size without picture distortion. If you are a graphic designer or regularly print larger size photos or crop and print to full size then you may need a higher mega pixel camera to suit your needs. However, if you normally print 4x6 photos or sometimes enlarge to A4 size then a 3 or 4 mega pixel is more then enough.

Don't waste your money on buying a higher mega pixel digital camera which you may not need.

Furthermore, the higher the mega pixel camera the more memory you need to save the photos. Some people I have noticed buy a 5 mega pixel camera and use the lowest resolution (640x480). This way, you can take hundreds of photos on a 32MB card. You will not notice any difference when viewing on the LCD screen or computer, it’s when you take it to develop you will notice the REAL difference.

Memory Card Chart - How much memory you need for your digital camera

*** The above data is just for reference. Different settings and different cameras will alter the amount of pictures stored.

Some digital cameras have so many functions such as digital filters, different shooting modes, movie with sound, 2 in 1 and the list goes on. Most importantly, check how many OPTICAL zoom not digital zoom the camera has. Optical zoom is when the lens zooms the object in and digital zoom is using software to zoom the middle part of the object and use pixels to fill in the picture. Basically, if you use an optical zoom you will get really nice and clear photos. When you use digital zoom, you will get grainy photos. This is most apparent when you develop the photo.

Most entry level camera only have digital zoom, but on your mid ranged digital camera it will have at least 2x optical zoom with most having 3x optical zoom. Most small compact cameras have at least 2x to 3x optical zoom. Mid sized cameras may have up 10x optical zoom.

Other functions to consider is how much manual control you have over the camera. Some point and shot cameras have limited manual controls, but many pre programmed setting such as: night scene, sports, indoor, sunny, cloudy and surf and snow. Most compact digital cameras are only point and shoot with pre-programmed modes and not much manual control. However, if you like having manual control over your digital camera check the camera specifications on how much and what manual controls are available.

5: Battery and what else you need.

Digital cameras eat up batteries very quick. If your digital camera uses AA batteries then it would be ideal to buy a battery charger with rechargeable batteries. Most cameras that use AA batteries don’t come with chargers and rechargeable batteries.

There are some discussions on whether lithium batteries or AA batteries are better. Basically, if you camera uses lithium batteries you save on buying a battery charger and batteries also charging time is quicker. But, if you want to buy an extra lithium battery you may need to pay a further $80-100.

On the other hand, if the camera uses AA batteries, buying an extra set would only cost around $20 for 4 batteries. Furthermore, if you use AA batteries and the batteries go flat you could just buy some batteries from a shop. Any way or the other, different people have different preferences for the batteries.

As mentioned earlier, a camera case is essential to protect your newly acquired asset. Most digital cameras don’t come with cases. Only some come with a carry pouch, namely Olympus Mju 300, Mju 410, C770.

All cameras come with the original manufactures one year warranty. You can also purchase extended warranty ranging from 1-4 years.

In terms of camera accessories, you can put them in several categories:

1: Essential accessories:

Memory card. Most cameras only come with 16MB, or at most 32MB, this will only give you a few photos. Most people buy at least a 128MB or 256MB card.
Camera case: I've seen people with 1 month old cameras with scratches on the outside and some even had keys stick into their lens and ruined the whole camera. A case will protect the camera on the outside and also if you drop it on the ground it will protect it.
Battery: If your camera uses AA batteries, most likely it won't have rechargeable AA batteries and no battery charger. In the long term if you use rechargeable batteries it will save you a lot of money in buying one time use batteries. Always buy the NImH batteries with at least 2100mAh. The higher the mAh amount the more power you'll get, hence more shooting time. Also, MimH batteries don't have the memory effect so even if your battery isn't fully flat and you recharge it will not affect the performance. Most Nimh batteries can charge up to 1000 times.
2: Accessories:

Lens/ Adapters/Underwater cases: If you are an enthusiast in photography, there are a number of lens for your digital camera. Usually, there are wide angle lens, macro lens and tele lens. However, please check if there are lens available for the camera you are buying. Not all digital cameras have the option of adding extra lens. Most digital camera available on the market have an underwater case you can buy separately. Usually, lens/adapters and underwater cases are quite expensive, but worth the money if you're an enthusiast!!
Tripods: Great for taking night shots.
3: Gadgets to make digital photography easy.

Card reader: A card reader will make transferring photos from your digital camera to your computer much easier. Just slot the memory card into the card reader and you can transfer all your photos onto your computer with just a click. Hence, no fiddling around with cables and inserting cables. If you do not use a card reader, just remember to have enough power/battery in your digital camera before you start transferring your photos. If in the unlikely event the camera battery goes flat prior the transfer is complete, you may lose some photos or have corrupted files.
Portable storage device: This is great if you are going on extended holidays. These portable storage devices range from 40GB to 100GB. It's like having 40 units of 1GB memory cards. Once the memory card is full upload the photos on the device and start taking photos again on the same memory card.
6: Research, Compare and Buy.

The most important factor in buying the right digital camera is work out what you want from your digital camera and do research on the internet or digital camera magazines. As mentioned earlier, the best advice is to ask friends who have already got one and ask if you could play around with their camera. When you get advice from them you get an unbiased view and true opinion.

Further tips can be found here:http://malektips.com/buying_a_digital_camera_help_and_tips.html

and here: http://images10.newegg.com/UploadFilesForNewegg/itemintelligence/NI_DC/NIC-Digital_Camera_Buying_Guide-v1.1e.doc