Pointers To Know Before Availing Of A Credit Card

Obtaining your first credit card is a significant accomplishment and adjustment. However, the devil is in the details. Even if you think you understand how credit cards operate and how to use one properly—before getting started, learning the ins and outs will save you money and hasten the process of establishing a good credit score.

  1. Beginners shouldn’t use the best credit cards

As a credit novice, you probably won’t be able to qualify for the most accepted credit cards, those with generous rewards and privileges, significant sign-up bonuses, or protracted 0% interest periods. In addition, only applicants with excellent credit scores (scores of 690+) and longer credit histories who meet specific income requirements are eligible for those top-tier goods. Although, you can improve CIBIL score as well.

With your first credit card, you’ll probably have to start modestly with a product designed for those with little to no credit history. The good news is that many of these cards have reasonable rewards programs and have no annual fees.

  1. Obtaining a credit card is more straightforward than a security deposit

Take a secured credit card if you’re having trouble getting approved for your first credit card, perhaps because you have no credit history at all to begin with. If you have a credit score, you can check on the CIBIL check app to know your score before obtaining the credit card.

Secured credit cards are for those with poor or no credit histories. Here you do not have to worry about CIBIL check. You must first make a cash deposit to open your account. Usually, your credit limit is the same as your deposit.

Most secured cards let you increase your deposit to acquire a bigger credit limit.

Losing this deposit would be possible if payments fell behind. However, if you consistently pay on time and keep your spending far within the card’s limit, you could be able to build solid credit in just a few months. The account may then be upgraded to a standard unsecured card by your issuer, or you may apply for an unsecured card and close the secured card while maintaining good credit. Of course, your deposit would return in any scenario.

  1. Your first credit card has the power to improve or damage your credit score.

Increasing your credit or improve CIBIL score is one of the key benefits of getting your first credit card. However, it might have the opposite result if you’re not careful. Everything is dependent on your actions.

Your issuer will submit information about your credit card use each month to credit agencies responsible for compiling the credit reports that serve as the foundation for credit ratings. The reported details are whether your payments have been made on schedule and how much of your available credit you have used.

Pay your credit card balance in whole and on time each month, and avoid exceeding your credit limit to ensure your credit card activity is as helpful as possible. (A good rule of thumb is always keeping your balance below 30% of your available credit.) To see where you stand, you may also track your credit ratings. To track your progress, you may get your credit score on a credit check app.

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