6 Reasons To Get A Credit Card As Soon As You Start Working - Kotak Bank
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29 JUNE, 2022

Credit cards were originally introduced in hotels in the United States and distributed to wealthy, frequent visitors.

They expanded to other industries and target groups over the years that followed.

In India, the credit and debit card markets arose in the 1990s due to market liberalisation, when more private banks were established, and public banks were brought up to international standards.

The number of credit and debit cards has increased in tandem with the rise of the middle class as they approach to get credit cards.

Although India is one of the world’s fastest-expanding economies, there is still a significant inequality in access to formal finance.

Banks are striving to close this gap by providing new payment products and tools that make formal credit more accessible to the young.

Banks and financial institutions have recently changed their focus to credit cards, buy now, pay later (BNPL), and credit EMIs for the youth.

Why Can You Get Credit Cards As Soon As You Start Working?

Credit cards can be a great tool to help a person build their credit history, but they are not just for people trying to rebuild their bad credit.

There are many reasons why one can get a credit card immediately after starting a new job.

1. Helps in building a credit history

One of the best reasons to get a credit card is that it can help people build their credit history.

When a person uses the plastic responsibly and pays off their bills on time, it builds up their credit rating over time.

In the future, if they want to borrow money from a lender or open up an account with them, they will view the person as one of their more responsible customers.

That is essential because it makes it easier for them to extend loans and other financial products like mortgages and car loans to people who need them.

2. Aids in emergency

In times of crisis or financial strain, having an emergency fund can be difficult without access to any credit.

A smart way around this problem is by using the credit card for emergencies like paying for car repairs or medical expenses that come up unexpectedly.

3. Pros of cashback and discounts

Many products offer perks that are related to credit card payments that would not be available otherwise.

Cashback and discounts are the most valuable rewards credit card offers.

Cashback is the easiest way to get a cardholder’s money back when they make purchases.

When they use a credit card, they will get a percentage of what they spend as cashback.

Discounts are another way to save on purchases with credit cards.

The amount varies depending on the merchant and the type of purchase, but discounts can be worth hundreds of rupees per year.

4. Other privileges attached to credit card

Several credit cards come with perks like complimentary airport lounges, access to golf courses worldwide, and free access to OTT platforms, among others.

5. Learn to manage finances

When a person uses a credit card, they carefully consider the spending and also weigh the advantages and disadvantages of using their credit card.

Credit management is a crucial financial skill that will assist them in effectively managing their finances.

6. Assisting with risk management

Though credit cards have pros and cons, if effectively managed can be a great source of payment.

Thus, credit cards can aid cardholders who have just started working in risk management.

Things To Check Before Getting Your First Credit Card

Since there are so many options, selecting your first credit card might be a challenge.

However, it is important to consider credit card eligibility and the below factors before buying your first credit card.

1. Annual fees

The first thing to consider is the annual fee. Individuals will have to pay this flat fee every year for their credit cards.

The good news is that several credit cards out there do not charge an annual fee and offer many more benefits than other cards.

2. Interest rate

Another essential factor to consider when buying your first credit card is the interest rate.

The interest rate is how much cardholders will be charged on their purchases when they carry a balance from month to month.

If they carry a balance from month to month, then this can add up quickly and make it hard to pay off any debt.

So, one must find a card with an interest rate that best suits their budget and lifestyle!

3. Credit limit

The credit limit is another crucial factor one must consider when buying their first credit card.

It would help if they always tried to get a higher limit, as this will help them get better terms from lenders and increase their chances of getting approved for loans or mortgages.

4. Rewards

Credit card offers endless benefits across a wide range of sectors.

So, hunt for one that suits your needs and offers discounts on the products you want.

However, make sure to examine how to redeem them because some of them may have an expiration date.

5. Other fees

Check all of the additional costs your credit card will charge you. For example, you will be charged a particular amount if you pay late.

Other costs include transaction fees, balance transfer costs, over-limit fees, foreign transaction fees, cash advance fees, etc.

So, before making a final decision, ensure you understand what you are getting into.


A credit card can help you build your financial reputation, increase the number of places where you can use your credit, and help you ward off criminals who might use other means to get control of your money.

Most importantly, a credit card can help you build your credit history.

That is essential because having no credit or bad credit can make securing loans for big purchases like cars or houses difficult.

If you have not taken the plunge into credit card ownership yet, you could think of it.

As long as you stick to using it responsibly, you can build up your credit history without any negative consequences.

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.