Ready for your first credit card? Here’s what you need to know

If you have started a new job or are considering expanding your credit, choosing a credit card might be a good option. This financial tool helps to fund your emergency expenses and provides additional rewards and cashback. However, getting a credit card for the first time must not daunt you.

What is a credit card?

A credit card is a financial instrument that enables you to buy first and pay for things later. It gives access to a pre-approved credit, which could be used to make purchases or withdraw cash up to a specific credit limit.

How to get a credit card

Step 1: Select a credit card

Before getting a credit card, navigate through the types of cards provided by various lenders. Choose a credit card suitable to your needs and income. Lenders offer different types of credit cards according to user’s needs such as travel, entertainment, business etc.

Step 2: Check the criteria

After selecting the right credit card, check the eligibility, requirements and the process to get a credit card from your lender.

Step 3: Apply for a credit card

Visit your credit card issuing entity’s website or branch to apply for a credit card. Fill in all the details in the application form and have all the documents ready. After filling out your details, submit your form to the card issuer.

The credit card issuer will verify all the details you provide in the application form and the documents you have submitted. Upon successful verification of your form and documents, the bank will approve your credit card request.

Step 5: Get your credit card

After approving your credit card request, the issuer will dispatch the card to your address. You will be required to accept the card at the time of delivery. After getting the card, you will be required to activate it. Along with your credit card, you will also receive a personal identification number (PIN) to activate your card.

Eligibility for a credit card

Every credit issuer will have its own eligibility requirements to issue a credit card. The criteria may also differ for various types of credit cards.

For most banks, you will require the following documents to get a credit card.

1. Identity proof
2. Address proof
3. Income proof
4. Passport size photographs

Some points to keep in mind while getting your first credit card

Fees: Credit cards have various fees such as annual fees, joining fees etc. As a beginner, a credit card should add much to your expenses. When you get your first credit card, try to get one with zero annual fees or fewer fees. Opting for such credit cards will make it easy to build a credit score without affecting your finances.

Rewards: Credit cards are mostly preferred by users as they offer many rewards, however as a first-time user, your options might be limited. With the limited options, choose a card that provides maximum rewards to get the most out of your first credit card.

Approval process: If you’re planning to get a new credit card, make sure to opt for one that is easily approved as being new to the credit card space may mean having limited credit history or income. Choose a card which basic and does not need a longer approval process. Choose a secured credit card as a first-time user as it is secured against fixed deposits. Additionally, try to get your first credit card from a bank with which you have an existing account, for easier approval.

Getting a credit card is the first step towards building your credit profile. As a first-time user, do not get swayed away by offers, rewards, or cashback, as having a credit card comes with the cost of making payments on time to avoid penalties. Additionally, make sure to spend according to your financial viability.

(Note: Using a credit card carries its own set of risks)