Applying for your first credit card can be an overwhelming experience due to a range of assessment factors involved. It makes for a coming of age moment where one is held to be financially independent enough to be taking this decision. Nevertheless, given the plethora of options, selecting the appropriate credit card for oneself can be a challenge.
To begin with, an individual has to determine the purpose for which he/she plans to avail of this card. Whether it will mostly be used to make purchases or to earn cash back and rewards would help understand what kind of credit card one should look for. Subsequently, there are various other parameters that need to be considered apart from credit card interest rates.
Few things to check before getting your first credit card
Here are some of the basic things to know before applying for a credit card for the first time –
The card type opted for (Secured or unsecured)
Credit cards can be of two types based on their eligibility requirements – secured and unsecured. While secured options require collateral and come with a corresponding credit limit, the latter often require users to meet eligibility criteria only. Further, the credit card interest rates can also differ between these two card types, incentivizing users to make a suitable decision.
Credit limit availability
Even though first-time credit cardholders are usually offered a smaller limit, you must check whether such an approved limit would meet your criteria or not.
Thus, if the primary objective is to build a credit profile, then a relatively smaller credit limit would not be much of a problem. However, if one plans to make big-ticket purchases, such a limit must be evaluated. Usually, after a year of usage, a cardholder can put in a request for a credit limit increase.
Rate of interest applicable
Credit card interest rate is often on the higher side for users. While such a high rate usually does not pose a problem if the amount due is paid within the interest-free period, given that a cardholder may carry a balance, credit cards with the lowest rate are always ideal.
Further, introductory benefits of certain credit cards like 0% interest rate for the first six months should be looked for when availing the card.
A credit card like the Bajaj Finserv RBL Bank SuperCard even offers a cash withdrawal facility with zero interest charges for an interval of 50 days against a nominal processing fee, making it easy for users to manage such facilities.
The card issuer also provides pre-approved offers to simplify the application process and help save time. Such benefit is extended to a range of financial products such as business loans, personal loans, credit cards, etc. You can check your pre-approved offer by entering the basic details like name and contact number.
Rewards programs available
Different credit cards come with varied reward programs. While some may provide significant discounts or cashback on shopping at partner stores, flight or hotel booking and others may offer accelerated reward points. You must thus choose a credit card whose reward program aligns with your spending requirements where you can avail your cashback or reward points. Opting for a suitable reward program often helps you save on the total credit card payment at the billing cycle’s end, you can also pay online credit card payment and enjoy the cashback.
Annual fees charged
Credit card payment does not only cover the amount used in making purchases but also the annual fee charged by an issuer, which varies from one issuer to another. Some credit card companies also charge an annual fee from second year onwards. It is thus better to read through the fee applicability thoroughly and opt for a credit card that offers this benefit.
If the main purpose is to accumulate maximum reward points, it is better to get a card that offers such points, notwithstanding the annual fee.
It is also advisable to go through the terms and conditions minutely, apart from comparing the credit card interest rate applicability when applying. Also, ensure to make all the payments in time during its usage to get the most out of your credit card.