Want to know the SECRET to How To Get First Credit Card? Don’t miss this life-changing opportunity! Learn how to kickstart your financial journey NOW! From understanding credit scores and eligibility requirements to selecting the right card for your needs, we’ll walk you through the process of obtaining your very first credit card.
In this Article
Benefits of Credit Card :
- 45 to 50 Days of Interest-Free Period: One of the significant advantages of using a credit card is the interest-free period, typically ranging from 45 to 50 days. During this time, you can make purchases without incurring any interest charges if you pay off the balance in full by the due date. This feature allows you to manage your cash flow effectively and make necessary payments without the immediate financial strain.
- Cashback and Reward Points: Many credit cards offer cashback or reward points programs. With cashback, you can earn a percentage of your spending back as a direct rebate on your card statement, providing real savings on your purchases. Reward points, on the other hand, accumulate with each transaction and can be redeemed for various perks, such as travel discounts, gift cards, merchandise, or even statement credits. These programs can add a layer of value to your everyday spending, turning your expenses into tangible rewards.
Important Points Before Your First Credit Card:
Before Getting Your First Credit Card Thing You Should Know!
- Credit Score: Your credit score is a crucial factor when applying for a credit card. It’s a numerical representation of your creditworthiness, based on your credit history. Lenders use this score to assess the risk of lending to you. A higher credit score generally makes it easier to qualify for credit cards with better terms and lower interest rates. Maintaining a good credit score is essential for accessing various financial opportunities in the future.
- Credit Card is a Loan: It’s important to understand that a credit card is essentially a loan. When you use a credit card, you’re borrowing money that you’re expected to repay. Failing to make timely payments can result in interest charges and late fees, which can add up quickly. Moreover, carrying a high balance relative to your credit limit can negatively impact your credit score.
- High Interest Charges: Credit cards can have relatively high-interest rates, often exceeding 36% on an annual basis. If you don’t pay your balance in full each month, these interest charges can accumulate rapidly, making your purchases significantly more expensive over time. It’s vital to manage your credit card responsibly to avoid these high costs.
- Impact on Future Credit: If you consistently miss payments or default on your credit card, it can have a long-lasting negative impact on your credit history. This, in turn, can make it difficult to qualify for new loans or credit cards in the future. Responsible credit card use is crucial for maintaining a healthy credit profile and ensuring your ability to access credit when needed
How To Get First Credit Card :
4 Ways to Get a Credit Card :
1. Salary Slip / ITR :
- Credit Card Eligibility Criteria: Your annual income should generally be more than 200,000 INR to qualify for most credit cards. The credit score Should be 750+, Age at least 18 years old.
- For Employees (Salaried Individuals): Typically, for employees, you’ll need to provide your 6-month salary slips as proof of income.
- For Business Owners (Self-Employed): Business owners are often required to provide bank statements and income tax returns (ITR) for the past two years as proof of income. This ensures that you have a stable financial background for credit approval.
2. Premium Account With Credit Card :
A premium account with a credit card is a financial package offered by many banks and financial institutions. It combines the benefits of a premium or elite banking account with the convenience and purchasing power of a credit card. Here’s what you need to know about this type of financial offering:
1. Premium Account Features:
- Higher Tier Banking Services: A premium account typically provides access to a range of high-quality banking services. This may include a dedicated relationship manager, priority customer support, and personalized financial advice.
- Exclusive Banking Perks: Premium accounts often come with a host of exclusive benefits such as preferential interest rates on savings and investment products, access to premium lounges at airports, and waived fees for various services.
- Wealth Management Services: Some premium accounts may offer wealth management services, helping you to grow and manage your wealth effectively.
2. Credit Card Features:
- Higher Credit Limit: Credit cards associated with premium accounts often come with higher credit limits, allowing you to make larger purchases or handle financial emergencies with ease.
- Enhanced Rewards: Premium credit cards may offer more generous reward programs, including cashback, travel rewards, or exclusive privileges like golf memberships or fine dining discounts.
- Travel Benefits: Premium credit cards frequently offer travel-related perks such as complimentary travel insurance, airport lounge access, and concierge services to assist with travel arrangements.
- Security Features: Premium credit cards may have advanced security features like chip-and-PIN technology, enhanced fraud protection, and liability protection.
3. Credit Card Against FD (Fixed Deposit) :
Credit cards against fixed deposits (FD) are a common offering from various banks, and the credit limit you can get typically depends on the bank’s policies and your FD amount. Here’s a brief overview of some banks and the approximate credit limits they offer against FDs:
- ICICI Bank: ICICI Bank offers credit cards against FDs, and they generally provide credit limits ranging from 80% to 90% of the FD amount, depending on their specific policies and the type of credit card.
- HDFC Bank: HDFC Bank also offers credit cards against FDs, with credit limits that can vary from 80% to 90% of the FD amount, based on the FD’s tenure and other factors.
- Bank of Baroda: Bank of Baroda offers credit cards against FDs, and their credit limits typically fall within the range of 80% to 90% of the FD amount.
- Axis Bank: Axis Bank provides credit cards against FDs, and the credit limit can range from 80% to 90% of the FD amount, depending on the terms and conditions.
- SBI (State Bank of India): SBI offers credit cards against FDs, and their credit limits are generally in the 80% to 90% range of the FD value, as with other major banks.
- One Card (SBM Bank): SBM Bank is known for offering credit cards against FDs with a unique feature. They provide credit cards with credit limits equivalent to the entire FD amount, which means you can get a credit card with a limit equal to 100% of your FD value.
4. Build a Credit History :
If you have credit score “0” & You can’t choose above option then Improve Credit Score
Building credit from scratch or improving a low credit score can be a gradual process, and responsibly managing consumer loans, such as mobile phone financing, can be a good strategy. Here’s how it can work:
- Apply for a Consumer Loan: When you have no credit history or a low credit score, it can be challenging to qualify for traditional credit cards. Starting with a consumer loan, like financing a mobile phone, can be an easier option. These loans are often more accessible to individuals with limited or poor credit.
- Make Timely Payments: Once you’ve acquired a consumer loan, ensure that you make all your payments on time. Timely payments are a crucial factor in improving your credit score. Consistently paying your loan installments demonstrates responsible credit management to credit bureaus.
- Build a Payment History: Your payment history is a significant component of your credit score. By consistently making on-time payments on your consumer loans, you start to build a positive payment history, which can have a positive impact on your credit score over time.
- Apply for More Loans (if necessary): After successfully managing one consumer loan, you may consider taking on additional loans or credit, but do so responsibly. Building a diverse credit history, including different types of credit, can further enhance your credit score.
- Monitor Your Credit Report: Regularly check your credit report (Once in three months) to ensure that your on-time payments are being reported accurately. You can obtain a free copy of your credit report once a year from each of the major credit bureaus (Experian, Equifax, and TransUnion). From the Paisabazar, Paytm like apps.
- Consider a Secured Credit Card: As your credit score gradually improves, you may become eligible for a secured credit card. A secured card requires a security deposit, making it less risky for the issuer. Timely payments on a secured credit card can further boost your credit score.
- Be Patient: Building or repairing your credit takes time. It may take several months or even years to see significant improvements. The key is to maintain consistent, responsible credit management.
It’s important to note that there is no guaranteed timeline for improving your credit score, as it depends on individual financial behavior and the credit reporting process. However, by following these steps, you can gradually establish a positive credit history and increase your chances of becoming eligible for traditional credit cards in the future
In conclusion, obtaining your first credit card is a significant financial milestone, and understanding the process is essential to make informed decisions. We hope you found our guide on “How to Get Your First Credit Card” helpful. If you have any questions or need further information on this topic or any related queries, please don’t hesitate to leave a comment. We’re here to assist you on your journey to financial independence and responsible credit management.