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5 things to know before you get your first credit card

  • Highlights

  • Opt for credit card that caters to your spending habits

  • Check the issuer’s eligibility criteria beforehand

  • Consistent credit repayments increase your credit score

  • Make big-ticket spends affordably with the SuperCard

Owning a credit card to your name is a great way to learn financial responsibility. Using a card over a period of time allows you to monitor your purchases and develop fiscal management skills. Furthermore, credit cards in India also help you save money as top-tier issuers have an exciting reward system that you can benefit from. They are also easily accessible as banks and other issuers offer special deals such as free first credit card for those who have not availed of credit before. As a college student, you can also apply for student credit cards to start building your credit history. However, before you rush on with your first credit card application, here are a few important things to know.

Various types of credit cards to choose from

Rather than applying for the first one you come across or the one offered by your bank, keep in mind that there are a plethora of credit cards. The most important factor that differentiates one credit card from another are the usage terms and features it offers. After all, saving money and getting exclusive deals are one of the most important advantages of credit cards.

Additional Read: How to Improve Your Credit Score


For example, the auto/fuel credit card caters to those individuals that frequently refuel their vehicles. This is because it waives off the surcharge on fuel and this can save you a significant amount of money if you refuel often enough. Typically, for everyday spends, a lifestyle credit card is the best option to go for. It offers benefits based on your spending patterns and lets you avail of special offers tailored to your bookings, purchases, and other online or offline transactions.

This is where the Bajaj Finserv RBL Bank SuperCard stands out as it offers some of the best credit card features in India. You benefit from exclusive discounts, earn cashback and can even access special amenities such as free movie tickets or exclusive airport lounge access with this card.

Furthermore, the SuperCard comes especially handy during a financial crisis as it lets you avail of an emergency loan against your credit card limit. This loan stays interest-free for up to 90 days and you can use the sanction to fund any need easily. In addition to this, the SuperCard also lets you convert any purchases over Rs.3,000 into 3-easy EMIs, making big-ticket spends significantly affordable.

Experience the benefits of 4 cards in 1 with your pre-approved SuperCard - Apply Now

 

Issuer-specific eligibility criteria

Knowing the issuer’s eligibility criteria beforehand is crucial to making any credit card decisions. These list of eligibility terms indicate whether or not you qualify for the card. Remember, every credit application you make incites a hard inquiry into your credit report. So, only apply when you know you qualify.

The impact of a credit card on your credit score

Besides the hard inquiry at the time of application when you score dips slightly, your credit score constantly gets affected by your credit card usage. Every time you make a successful repayment, your score sees an increase. Similarly, when you default, it dips. Additionally, there is the matter of your credit utilisation ratio. This is determined based on your total credit limit and your usage. Generally, financial advisors say that it is best to keep this ratio below 35%. A high ratio shows you in a negative light portraying you as credit-hungry. Thus, keep your spending within limits and don’t use up your entire credit limit each month.

The difference between a minimum and total balance payment

Understanding the nuances of minimum and total balance payment on your credit card bill is important. Total payment signifies your total credit card dues for one billing cycle and minimum due is a fraction of the total due inclusive of EMI and other charges. A common pitfall is to assume that making the minimum payment on your bill is enough.

In truth, the minimum payment simply ensures that your credit card remains functional and allows you to keep making purchases while the total balance increases. A healthy practice is to check your statement and pay off the total balance in full. This is because non-payment of credit balance incurs hefty interest fees, which continue to grow until the balance is paid. It is also important to know the grace period between bills so that you can monitor your spending diligently, which allows you to make payments in full and on time.

Additional Read: How to check your credit card balance

Processing and annual fees involved

Before you settle on your first credit card, you must check with the issuer about the annual fees and the processing fees. These fees can indicate whether or not the card is suitable for your financial profile and if you can afford it. Remember, credit cards typically carry a processing fee for certain transactions, so check the fine print before you sign on to have a better experience.

All these factors play in part when you’re on the path to choosing your first credit card, so do so with care. Once you have researched the card and its benefits, you can fuel your purchasing power with the right credit card. Don’t forget to scout the market for an issuer that gives you access to deals and offers as well. These can help you save more with every purchase. To unlock your credit potential, check your pre-approved credit card offer for a customised deal and enjoy instant approval.

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