The process of applying first credit card is not easy. Today, there are several credit cards available, and there are a lot of stories about the misuse of credit cards. Credit cards are considered powerful financial tools.
It does not only help to build a strong credit history but is also beneficial in several ways if it is used rationally. If you also want to apply for your first credit card, there are some things you should know.
This article outlines important things you must know while taking the initial steps toward your first credit card.
Type of credit card It is important for you to first know all types of credit cards available. For example, if you are applying for a credit card first time, then you must opt a beginner-level credit card with a low annual fee.
However, choosing a credit card that fits your requirements is suggested, like a shopping credit card, travel credit card, fuel credit card, etc.
Your income
Credit card issuers always ask you for income to check your repayment capacity. Your income plays an important role when you apply for a credit card. Your income will tell the credit card issuers whether you can pay the credit card bill payments or not.
The chances of getting a credit card will increase as your income increases in your income bracket.
Begin with a low credit limit
Initially, credit card issuers will offer you a low credit limit to reduce the risk. Once you understand how to manage the credit card effectively, they will provide you the option to increase the limit of your credit card.
The limit of your credit card is also linked to your income. In case, if you are a low-wage earner, then your credit limit is automatically adjusted by your earnings.
Important terms and conditions of credit card
It is important to know all the terms and conditions of a credit card, as they consist of the information you agree to when using the credit card. Here, reading about the APR range of cards, how rewards work, applicable fees, and other card-related details is suggested here.
Also, you should take the print of all terms and conditions and read it properly before opting for any specific credit card.
Fees applied to credit card
It is suggested to check the fee and charges associated with a credit card. You should check out the annual fee, joining fee, transfers fee, finance fee, foreign transaction fee, etc. Ensure that you check all the numbers before burdening yourself with unexpected charges in the future.
Conclusion
First-time credit card applicants face many challenges. This requires research and consideration of several factors. You should understand completely how the credit card works and your income and read the terms and conditions properly.
Understanding the possibilities and odds of a credit card before opting for it helps you save money and create a good credit score.