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4 Things you must know before getting your first credit card
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Your First Credit Card: The Key to Unlocking Unlimited Experiences
Credit card; a name that not only invokes excitement but also throws up many questions, especially if a person is applying for his or her first credit card. Today, credit cards have become an essential necessity that not only reaps many benefits, but also strengthens your credit history and credit score, and provides easy disbursement of the loans. Credit cards provide you with financial freedom, which can help you to experience new things life has to offer.
The problem, however, arises while applying for the first credit card. If a person has all the necessary information while applying for the first credit card, then it’s a joyride. But when a person doesn’t have the proper information needed for their application of the first credit card, the process can be daunting and discouraging. Worry not; we are here to guide you through the whole process while providing the important knowledge as you make the decision on your first credit card.
Things to Know Before Applying for Your First Credit Card
Annual percentage rate: This is the first and foremost point to keep in mind while applying for your first credit card. Credit cards are like microloans, i.e., you spend the money that you do not own, unlike debit cards where you can only spend the money you possess. So, when you repay the borrowed amount, the bank also charges interest on that. This is called the annual percentage rate or APR. This varies not only from bank to bank, but also from package to package within the same bank. So, always keep this vital information in mind while applying for the first credit card.
Here, at Kotak Mahindra Bank, we have tailored a wide range of credit cards to suit your lifestyle. They carry great deals with some very competitive rates.
Minimum repayment: Minimum repayment is a convenience that the bank has created especially for you. It means that you don’t have to pay the entire money at once when your credit card bill arrives. You can pay a minimum amount and then repay the entire amount when you have the money ready. This differs from bank to bank. Some require only a token amount while others ask for a substantial payment. You must, however, keep in mind that interest will be charged on the pending amount nonetheless. Therefore, it’s very important for you to understand what amount is convenient for you to pay after you get your first credit card. Your minimum repayment amount should be lesser than your repayment capacity to avoid paying additional interest on pending amounts.
Annual fee: The third factor to understand before you apply for your first credit card is the annual fee. While some cards offer a free service without any fee, others charge an annual fee when you use credit cards and the bank’s facilities. You have to pay the fee irrespective of the frequency of use. The amount of the fee differs from bank to bank and from card to card. Therefore, it is imperative that before you apply for your first credit card, you must be aware of its annual fee. If a bank is not directly declaring it, then find out about the hidden charges, which are likelier regular charges.In Kotak Mahindra Bank, we have very straightforward and open annual charges. You can also compare your credit cards so that you can choose the right one as per your need and convenience.
Introductory interest rates: These are the lowest and often best rates that come along with a credit card. They are applicable for a minimum of six months and up to 24 months. They are generally offered to customers with an excellent credit score or to the ones who open specific kinds of accounts with the bank. Their interest rate varies from 0% to 4%. Therefore, keep in mind while applying for a credit card, as it can be very advantageous.
How to Qualify for Your First Credit Card?
A credit card brings a whole new experience to your plate. You not only get the ease of shopping, but you also become financially independent. However, in order to obtain your first credit card, you need to meet some eligibility criteria set by the banks to decide whether you are eligible for their credit card or not. These are:
1. All banks have a minimum and maximum age requirement. Kotak Mahindra Credit Cards can be issued to applicants above 21 years and below 65 years. However, Kotak Mahindra 811 #DreamDifferent Credit Card and NRI Royale Signature Credit Card allow applicants as young as 18 years and as old as 75 years to avail the benefits.
2. Every bank requires a minimum salary and also asks for a salary slip or ITR as proof at the time of application.
3. You must be a resident of India and living at a serviceable location within the country.
4. Having a good credit score is not mandatory, but it helps in the quick approval of the credit card application.These are some basic eligibility parameters to keep in mind while applying for the first credit card.
You have received your first credit card. Congratulations! Now see how to use it in simple steps:
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How to Use Your First Credit Card?
You have to activate your credit card before you can start using it. The bank sends you detailed step-by-step instructions of doing so with the card and/or through email and SMS. By following them, you can easily activate your first credit card.
Once the card is activated, you can now use it for various activities and transactions:
1. You can swipe your credit card at the ATM to get the cash like a debit card.
2. You can also make online purchases with your first credit card. You just have to enter card details. You will then receive an OTP, which you can enter to confirm the payment.
3. The bank nowadays provides you the comfort of turning your purchase into EMIs. For this, you have to visit your credit card account online and have to visit the ‘Convert to EMI’ section.
4. One more thing that you have to keep in mind is the credit card statement. Always be vigilant of your statements. It helps you to keep a track of your expenditure and ensures that you don’t overspend.
While applying for your first credit card remember that it is like an important companion which helps you in times of your financial needs and if you use it wisely, it keeps you free from any financial trouble and constraints.
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