Nowadays, people want to have a credit card as soon as they turn 18 as it is the minimum required age to apply for a credit card. Due to the financial power and exciting benefits provided by these cards, the credit card market has become vast and there are lots & lots of options to choose from. Many people do the mistake of applying for a credit card without having much knowledge or without doing the required research and as a result, they don’t just face rejection but also hurt their credit score. Choosing the right card for you takes research & time and this time seems to be worth it when you get benefits. If you are thinking of applying for a credit card, have a look at the following points to know what to do before proceeding further with your application.
Check Your Eligibility & Credit Score
Different credit cards come with different eligibility criteria that need to be fulfilled by the applicant in order to get approved for a credit card. These criteria generally depend on three factors: the applicant’s age, income, and credit score. Some card issuers provide credit cards to people who are 18-years-old or older, and others have kept the minimum required age as 21 years. Moreover, you should have a stable source of income in order to get approved for a credit card. The minimum required income can vary depending on different card issuers as well as different cards.
Other than age and income, your credit score also matters. Card issuers check for your credit history & score before approving/rejecting your application in order to have an idea about how creditworthy/risky you are. Some issuers issue cards only to the individuals having a very good credit score while others can issue a card to someone with an average credit score as well. So, before applying for any credit card, you must check your credit score so that you can have an idea about which credit cards you can be approved for and which not. If you are someone who has no credit history at all, it is advisable for you to start with a secured credit card as it can help you build your credit.
Analyze Your Spending Habits
After checking your credit score, the very next thing you need to do is: analyze your spending habits carefully. Note down all your expenses and filter out the categories where you spend the most. As different credit cards come with exciting benefits over different categories, you should go with the one that can provide you with the maximum benefits in a category where you tend to spend the most. If you spend most on groceries/shopping, you should look for cards in the same category, if you are a frequent traveler, you must look for the best travel credit cards in India, and so on. Getting a credit card that doesn’t match your need is never a good idea.
Compare Different Credit Cards
Now, after understanding your spending behavior, you might have decided what are benefits you have to look for in a credit card. But, there are a lot of shopping credit cards, a lot of travel credit cards, and so many fuel credit cards as well. But, you only need one of them. So, you must compare different credit cards on the basis of their annual fee, other charges, and all the benefits provided by them. There are some credit cards that come with a very high annual fee, but provide average benefits whereas there are some zero annual fee credit cards, such as Amazon pay ICICI credit Card & Flipkart Axis Bank credit Card that come with really exclusive benefits. So, you must wisely choose the one that can benefit you most with minimum charges.
Understand Credit Card Terms & Conditions
The next very important step to follow before applying for a credit card is to understand its important terms and conditions. After deciding which card you are going to apply for, look for its MITC (most important terms and conditions) online and read them thoroughly. You can find all the fees & charges like interest rates, late payment fees, cash advance fees, forex markup charges, etc here. Many people apply for a credit card without reading its terms & conditions and they unknowingly make mistakes that shouldn’t be made. So, it is highly advisable to go through it at least once.
Understand How You Can Avoid Annual Fee & Other Charges
Other than the lifetime free credit cards, most of the cards come with some spend-based or other types of conditions to get your annual fee waived off. So, you should check for these conditions and try to fulfill them so that you can avail all the benefits of your credit card for free. Other than the annual fee, the best way to avoid any interest charges is to make your payments before the due date. All the cards provide you with an interest-free period to pay your outstanding amount without any extra charges. However, there is no interest-free period for some transactions, such as cash advance and hence it is advisable to avoid withdrawing cash using your credit card.
These are some very important steps that you must follow before applying for a credit card so that you don’t regret your decision afterward. You should choose your card wisely rather than just going with the first option that you see. It makes no sense to get a credit card that doesn’t suit your requirements as it will not benefit you much. Getting a credit card is always good, but you should also keep in mind that you need to use your card responsibly and avoid late payments so that you don’t make yourself financially unstable. Also, make sure not to apply for so many credit cards within a short time period as it can hurt your credit score due to so many hard inquiries on your credit profile. If any doubts or queries are still going on in your head, you can freely ask us in the comment section below!