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First-Time Credit Card Applicant? Here’s What Must Know

Submitted by admin on May 25th, 2024

People’s perception of credit cards has changed over time. We cannot blame them. The demographics that used to own it earned them the label “LUXURY.” However, this is no longer a class-sensitive entitlement; rather has emerged as an always-in-wallet/pocket thing to a large section of society. This blog covers the nitty-gritty of applying for a credit card – guidelines that first-time applicants must know.

If you want to tap into the immense convenience and financial freedom that can be enjoyed by holding a credit card, keep reading the blog post. If you are a young adult, a credit card will provide you with convenience, flexibility, and a good opportunity to cement a strong, stable and impressive credit history.

Understanding the ABC of How Credit Cards Function

Before proceeding to how you can apply for a credit card, you should understand the ABC of how a credit card functions. A credit card, though not made of plastic, is a plastic thing that allows for cashless transactions. A bank or any registered financial institution has the authority to issue credit cards.

With a credit card, you can quickly avail a pre-approved credit limit to buy products and access services. However, rights always come with responsibilities. When you are entitled to use a credit card, you come under the written obligation to pay off within a specific period.

A credit card and a loan share some basic features, both in structure and functions, with one exception the former sets an upper limit of expenses. The credit issuer sets the limit and requires you to pay off a pre-approved amount after each billing cycle is complete.

For example, suppose an Indian bank has issued a credit card with the upper cap of Rs 50, 000. You want to buy a smartphone that would cost Rs 20, 000. You have two repayment options – pay off the whole amount within the next cycle (in this case, you won’t have to incur an interest charge) or pay in installments (in this case, you have to bear the burden of interest),

Each month, you will receive a statement from your bank, which will mention the details of your transaction and the total amount they owe you. You must pay off on time to avoid paying interest and maintain an unblemished credit history.

Applying for a Credit Card? Check How to Proceed

You need to follow a few simple steps to obtain a credit card. Here are those steps in layman’s language:

Ø  Check your eligibility criteria

Ø  Choose the right credit card

Ø  Prepare the required documents

Ø  Finally, fill out the application form with the requested details,

Responsible Usage: You Should Master the Art

Irresponsible credit card usage is a common symptom, especially among first-time users. The quick availability of cash often pushes them towards impulsive purchases. As a result, they run out of the upper credit limit within a short time and even tend to overspend. This leads to high-interest charges, a drop in your credit card points, and even closure of your credit card account. Needless to say, it soils your credit card record.

Having a good credit card score is important, especially if you apply for a loan. So, use your credit card responsibly to avoid dire consequences and maintain an excellent record.