Things to know before applying for your first Credit Card

Things to know before applying for your first Credit Card

In today’s age of online transactions, cash is slowly becoming more and more outdated by net banking and other cashless methods of commerce such as debit cards.

The importance of a credit card can never be understated, and only those who already have one of their own would know the sheer joy of getting hold of their first credit card. A credit card not only protects you from situations where you are in an emergency requirement of economic assistance, but it also saves you from potential account frauds.

Using a credit card correctly also substantially increases your credit score, which increases your creditworthiness – the basis of whether you would be granted further loans or not.

Despite its uses, getting a credit card can be tricky and cumbersome initially, especially for those who have never known the proper procedure for the same. If you are one of them, fret not, as this article will discuss all about credit cards and what you need to know before you get your own.

What is a credit card?

In a nutshell, a credit card is a card that would allow you to buy anything even if you do not have the cash beforehand. Each card has a unique number that the sellers can trace back to its issuer, who pays the seller their due.

After that, the cardholder has a limited time to pay off the money owed to the credit card issuer. The earlier they pay off, the more beneficial it is for the cardholder’s credit score.

In case of defaulting the deadline, a burgeoning interest rate would be implemented, which becomes more alarming and amounts to a considerably significant figure for the cardholder with the passage of each day beyond the repayment day.

Credit cards are usually small plastic cards with a unique number attached to an account. Most are magnetic stripe cards, and many have an EMV chip for card readers.

Benefits of using credit cards

Even if you have heard ominous warnings of financial advisors cautioning against falling into a spiraling debt by using credit cards, if used responsibly, credit cards can prove to be more beneficial than the “safer” option, i.e., debit card. Some of its many advantages if correctly used are:

Can substantially affect credit score

It has been clarified that credit cards operate on a system of credit or pre-possession of funds that are not liquid cash. There is a rate of trust and incentive involved in the entire process, with the credit score quantifying precisely that.

With a maximum possible credit score of 900, the more credit score you have, the better credit cards you would be offered, in the process gaining access to better one-time deals.

Incentives and offers

Most credit cards provide you with a variety of tempting offers, incentivizing their use. These offers can come in the form of cash-back or point accumulations every time you swipe your card for use. 

By paying off these purchases in time, your point value continues to cumulate, potentially being able to be redeemed later as air miles or being used to pay off any outstanding dues.


In the case of debit card thefts, you would face a far greater risk as thieves deplete your actual cash balance. This money is extremely difficult to trace. RBI and bank guidelines always warn you not to share your card credentials with anyone over call or emails or fake service messages, as they could be scammers trying to get hold of your savings.

Although it rarely happens that such cases of financial crimes in India get a fair judgment, enabling the individuals to retrieve the money stolen from their account. The time by which the fraud is traced, your credit score will already be hampered beyond repair.

In case of credit card thefts, however, none of your actual in-hand money is lost as it is an allowance given to you by the credit card companies. Therefore, regaining your lost credit card proves an easier process as your money is only nominal and not tangible per sé. 

You must remember to report the theft before your grace period for repayment (upto 60 days) ends to prevent hampering your credit score and incurring higher interest repayments.

Things to know before you get your credit card

Now that you know the benefits of having your credit card, you must remember not to rush into things. To help you make your decision calmly and logically, there is a list of important pointers given below for your perusal:

Types of credit cards

Credit cards can come in various shapes or forms, and it is essential to know which type is the right fit for you. If you’re a newbie, opt for a credit card with a low credit limit to restrict wanton expenses. The main categories of credit cards in India are

Student credit card

This credit card is beginner-friendly, has little or no joining fees, has a low credit limit, and is usually readily approved.

Travel credit card

This credit card is preferred by those who travel extensively. It lets you avail discounts on airline tickets, bus and railway bookings, cab bookings, and more. This reward type of credit card offers points as rewards on each use. Accumulate points for redemption on future bookings.

Shopping credit card

This credit card provides discount offers, cashbacks, and attractive waive-offs the more you use.

Secured credit card

This credit card comes with the most attractive benefits to your credit score. Being already backed by a cash amount from the cardholder, the risk is substantially less, allowing for more benefits.

Income should dictate your expenditure

The credit card issuers would want to double-check your income statement before issuing their credit cards to you. To get a sound credit card, it is mandatory to have a reasonably high-income bracket to let the card issuers know that you do possess the ability to repay their loans. 

You must also stay within your means and not spend more than you can pay for.

Read terms and conditions thoroughly

Before applying for your desired credit card, you must carefully and with concentration read through all of the terms and conditions, checking and rechecking for any hidden or possible extra costs. Read about the card’s APR (Annual Percentage Rate) range, how the rewards system works, and other significant details.

Always pay more than the minimum

This is a major area of confusion and suffering for newbie credit cardholders. They think that the minimum amount is all they have to pay and go on an expense spree veering out of control. The minimum amount payable on your credit card statement signifies merely the past month’s interest and fees (if any) and only a minuscule amount of the underlying balance.

Therefore, you only make a tiny difference to your total outstanding amount when you only pay the minimum amount. In this situation, it is easy to keep on making new purchases and fall into debt and be harassed by viciously climbing interest rates, so always pay substantially more than the minimum to stay safe.

Know all about your credit

To be an excellent cardholder, you must possess a high or extremely high credit score. Your credit score depends on your timely repayments and the utilization of your total credit allotment or credit utilization ratio.

The percentage of your total credit available to be utilized is your credit utilization ratio. To maintain a sound credit score, you must ideally not utilize more than 30 % of your credit. If you use more than 30%, your credit scores will take a beating as there is substantially more risk involved.

What to do in case of too much outstanding credit card pending balance?

For beginners, it is easy to get lost in the joy of purchasing most things even without needing any cash. However, in that process, most end up with regular late or defaulted payments, which pile up in an enormous amount which prove to be too daunting a sum to pay off.

To help you repay the same, Money View is offering credit card repayment personal loans with attractive interest rates and flexible repayment options.

You can obtain a personal loan of up to INR 5 lacs with a repayment term of up to 60 months or 5 years and an interest rate of 1.33% per month. What’s more? You can opt for this loan without collateral and security, even with a low credit score.

The loan given by Money view is an excellent option to consider when faced with a huge debt, mending your damaged credit in the process. Log on to Money View for more details:

When there is no checking for credit of borrowers from lenders then a loan is provided known as a no credit check loans. And lenders only look at the income of borrowers instead of their history of credit.


All in all, you have to be practical and responsible in using a credit card. A credit card can be a distinctive form of payment in competent hands, beating even the debit card. All you would need is a composed expenditure ethic and a responsible repayment sense to get closer to that perfect 800+ credit score and the incredible benefits it would provide.

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