Blog

Are You a First-Time Credit Card Applicant? Know What You Should Consider

Submitted by admin on May 17th, 2024

A decade ago, only a few used to own a credit card due to strict eligibility criteria to get it. Naturally, it was a luxury thing. The banking and overall financial landscape has undergone a significant change. Nowadays, credit cards are easily accessible to many of society. It’s a password for a little more freedom and convenience. If you are applying for a credit card, this blog is a guideline.

How Credit Cards Function

Before knowing the procedure to get a credit card, you should have a clear understanding of the credit card basics. A credit card is a plastic card that is issued by a bank or any other financial institution. With it, you will have easy access to pre-set credit limits that you can use for different purposes like buying something or availing services. You must pay off the used credit within a specific period.

A credit card works similarly to a loan. The only difference is you can spend up to a certain credit limit instead of getting approved cash upfront. The issuer sets the limit and you have to pay off a certain amount to the lending institution by the end of each billing cycle.

Every month, you will get a statement containing your transaction details and total dues. It’s a must to pay off your bills in a timely to avoid interest charges. This will also help you build up a good credit score.

Eligibility Criteria

You must meet certain eligibility criteria to apply for a credit card in India. These include:

Nationality: The applicant must be an Indian citizen or an NRI (Non-Resident Indian) to apply for a credit card.

Minimum Age: 18 years (In some banks, this minimum age is 21 years)

Income: You must have a steady source of income for your credit card application to be approved. The minimum requirements vary from one bank to another and range between Rs 15, 000 and Rs 25, 000 per month.

Credit Score: First-time applicants usually don’t have a credit history. However, it’s important to build up and maintain a good credit history from the very beginning. A credit score of 750 or more is a good one and can increase the chance that your application will get approved.

Choose the Right Credit Card

You should choose your credit card according to your requirements and spending habits. First-time credit card applicants must remember the following factors:

Fees: Focus on cost minimization by using credit cards with no or low annual fees. Some banks provide lifetime free credit cards to their clients. This is a good starting point for first-time credit card users.

Rewards: Choose a credit card that offers benefits and rewards that suit your personal needs and lifestyle. If you shop online now and then, apply for a credit card offering higher cashback or reward points on online purchases.

Eligibility: Ensure you have the eligibility criteria for the credit card you are applying for. Some banks provide credit cards specially designed for young professionals or students.

Brand: Always consider the reputation of the credit card issuer. Work with a well-known bank with an excellent track record of consumer security and service.