Availing a credit card of your preference acts as a huge milestone in your life. However, before availing a credit card, ensure to stay careful as well as cautious. There is zero doubt in the fact that credit cards hold hundreds of benefits, however the fact that improper usage of cards may push you into massive debt over the long term, thus not just hampering your credit score but also your long-term financial stability.
To assist you move cautiously through the credit journey, curated here is a list of dos and don’ts as you apply for the credit card.
Important things you must know before opting for a credit card
Before moving ahead with your credit card application procedure, ensure to be aware of all information linked with credit cards –
Explore all kinds of credit cards
Looking at the advantages offered to you for using different kinds of credit cards, you might be attracted to the one providing the highest benefits in the area in which you spend your money. Hence, while determining which card you are going to opt for, recognise your financial requirements first and then apply for the credit card that meets all your requirements, even if it provides lesser advantages than others. For instance, suppose on your research online, you found that Yes Bank credit card offers you the highest benefit on the shopping you conduct on a periodic basis. So, once you have read all the terms and conditions, checked the annual fee, finance charges and other charges, you can approach the Yes Bank credit card customer care to submit an application for credit card or visit the official Yes Bank’s website to avail the Yes Bank credit card of your choice.
Make sure that you hold a regular income
Purchasing a credit card might appear like attaining a massive milestone. However, you must go ahead to purchase one just if you hold a stable income. This is crucial because not holding a regular income might push you in a situation where you might not be able to make payment of your bills, and might ultimately fall in a debt trap, which may negatively impact your financial status aggressively.
Begin with spending very less on your card
As you are only a beginner in the journey of credit card, you must go very slowly. Start with spending a lower credit card amount so that you ultimately understand how a card actually functions and how well you may balance your finances using a credit card.
Go through the important terms thoroughly
As it is the very first time you are opting for a credit card, ensure to be aware about all the terms linked with the credit card from before. Go through all the documents very carefully and ensure you understand everything very properly. You may contact the financial institution in the case of any problem, issue or query.
Get to know about all crucial additional expenditures
Credit cards hold a lot of add-on expenditures. If you are unaware of such charges before opting for a credit card, you may feel very disappointed and even exploited later. Thus, learn regarding all the crucial expenditures that you might incur later. Your credit card might hold an annual charge, or additional fees on foreign transactions, rate of interest fees on late payment of the dues or withdrawal of cash through credit card, additional cash withdrawal or cash advance charges, etc. You must ensure to focus on all these expenses before applying for any credit card.
Maintain your credit profile and score
Credit cards are one the crucial financial instruments that can assist you to ameliorate your score. Effectively using your card will assist you to ameliorate your score. Try and pay your full credit card dues well before the due date and in full, avoid spending over 30 percent of your overall credit limit, unless extremely necessary, use your card as per your repayment capacity.
Also Check: Yes Bank Credit Card Customer Care
Read on to know the dos and don’t to avail your first credit card –
|Effective use can ameliorate your score.||Improper use can impact your score aggressively.|
|Keep your card safe with just yourself.||Losing your card might result in fraudulent transactions and misuse of your card|
|Use your card to meet the emergency expenditures.||Credit cards provide a borrowed fund, so that you do not overspend.|
|Purchase the credit of your requirement and use the same effectively to earn high reward points.||Keep a thorough check on all the card offers and deals like discounts and rewards on your credit card. Do not avoid them.|
|Pay your credit card dues in full and on time.||Late payment of your credit card dues and bills may result in high interest fees.|
FAQs (frequently asked questions)
Is it safe to opt for a credit card?
Yes, definitely it is safe to opt for a credit card. All credit cards come with a secured 4-digit identification number that can be used to verify you as the owner of the credit card. A credit card’s PIN code is exactly the same as a signature to verify your identity and assists you protect yourself against any kind of fraud.
Why should you get your first credit card?
You must avail a credit card as early as possible in your life after you begin working. Doing so will allow you to begin with your credit journey and build your credit score. Holding a good credit score allows you to be eligible for the loan of your choice may it be car loan, home loan, education loan, wedding loan, vacation loan, etc. Even holding a good credit score makes you eligible for a better credit card of your preference.
Is it very important to hold a credit card?
It is not very important to hold a credit card. In place, it can be mentioned that it is advantageous to hold a credit card due to the different benefits. For example, a credit card assists you to mitigate any urgent or major financial expenses at the luxury of paying the amount later within the due date in full at zero interest cost. Additionally, usage of cards can allow you to earn benefits in the form of cash backs, discounts, and rewards points.