Selecting your first credit card is difficult, as most of us have many options and restricted knowledge. On the other hand, your first credit card can bring you many benefits when selected wisely. Since there are plenty of alternatives & options you just need to research and analyze them well. You might be thinking how to do this? Let’s make this easier for you & start with a brief tutorial to help you get your first credit card.
The first and the most important thing which you need to do here is analyzing yourself. Yes, you read it right, analyze yourself in terms of your expenses. There are different types of Credit cards depending on the privileges it offers to its customers. These credit cards are lifestyle cards, travel cards, fuel cards, student cards and many more like these. So to avail the benefits you need to analyze your major expenses. If you spend a lot on travel then you should opt for travel credit cards, if you are a shopaholic and a movie lover then you should go for a lifestyle credit card.
Well apart from these, there are furthermore things which one should consider before getting their 1st credit card. Let’s discuss them all.
Credit Card Reward Benefits
When you get reward points or cash-backs- it feels wonderful, as these reduce the cost of your next purchase. But to get more points and offers you must know where it comes from.
Credit cards offer reward points on their uses. So, to avail more benefits you need to know where to use your credit card so that you can make more points. You should also have complete knowledge of how to redeem them.
The annual fee charged for credit cards varies from provider to provider. Some charge ₹250 while other charges ₹1000 or even more. There are also credit cards whose annual charge is zero. Since there are a lot of options available, for the first experience it’s better to go for the one that charges no annual fee. But for this, it is important to read the terms & conditions properly. For some credit cards, the joining fee is zero but the annual charge is applicable from the next year, so you need to know all this before you get your credit card.
Some credit cards give you rewards points as a joining bonus and as a renewal gift when you pay the annual charges. Hence, it becomes important to calculate that is the rewards worth paying the annual fee. If yes then you can also go for a credit card who has annual charges applicable to it.
This is also one of the most important things you should consider while choosing your credit card. Your credit limit defines your uses, which means if you get a credit limit of one lakh you are free to use one lakh as per your requirement. Usually, your credit limit depends on your income and repayment capacity. So if you want a higher limit credit card and the provider you choose is not allotting you that particular credit limit, then you can move to the other lender.
The time period for which the credit card providers don’t charge you interest on your uses is known as an interest-free period. The cycle of interest-free period again varies from lender to lender and generally ranges from 30 to a maximum of 60 days. Hence, it is always beneficial to go with a lender whose interest-free period is long.
The interest rate charged for credit cards is generally high as it provides you access to funds at the time you want. Secondly, the funds approved are unsecured which brings more risk to the lenders.
Hence it becomes important to check for the interest rate of your credit card as even a small variation in rates can save your lot of money in the long run.
These points are a must to check before you select your first credit card. Don’t forget to check the terms and conditions before you sign the agreement. And first and the most important thing- always compares different credit cards in the Categories of cards which you are looking for. Compare well! Analyze Well! Think well! Select the best!!