Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
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    Questions To Ask When Getting Your First Credit Card

    Plastic money has brought in great convenience in the fast-paced life of people. Be it an online purchase or a regular one, monthly bill payments or fancy dine-outs, plastic money has become the sine qua non of the present generation. Debit and credit cards are now an essential part of people’s wallet because of the convenience they offer while making a transaction. Credits card, especially, has its own appeal as it gives buyers the power to purchase without worrying about draining out the bank balance.

    If you are planning to get a credit card for the first time, there are a few things that need to be considered before applying for a card.

    1. Do you need a credit card?
    2. The most important question one needs to ask before applying for a credit card is if taking a credit card is that important and why. Credit cards have their advantages and disadvantages. While for people like frequent travellers it is usually a better idea to carry plastic money instead of cash. However, it would be irresponsible on an individual’s part to take up a credit card to go for shopping or indulge in unnecessary spending as it might lead to heavy debts. Credit cards can be useful in case there is an emergency, and the bank account is low on cash. However, it is always good to be judicious while taking a decision that involves money. One should weigh the pros and cons of taking up a credit card before applying for one.

    3. How to choose the right card?
    4. Next important question that one needs to ask himself/herself is which type of credit card might serve his/her purpose better as banks provide various types of cards based on the requirement and lifestyle of an individual.

      For first-time credit cardholder, this question should come above anything else because –

      • He/she has no credit history.
      • He/she must consider only that type of credit card that is suitable for his/her lifestyle.

      Different credit companies offer different kinds of reward programmes, cash back options on the credit cards. So, it is better to know about these categories and then select from the one that best serves the purpose and gives maximum benefits and privileges.

    5. How does a credit card work?
    6. A credit card allows the user to take a short-term loan of a limited amount. However, unlike other loans, interest charges may or may not be levied on the loan amount depending on the fact how timely the due is being paid off by the cardholder. The credit card is billed each month according to the expenditures made on the card. The money spend is regarded as the outstanding amount that one needs to pay before due date which is set by the card companies. Any delays in paying the debts might result in an expansive interest rate being added to the current dues.

    7. Is there a joining fee and annual fee to take a credit card?
    8. Since there are different types of credit cards, not all have a joining or annual fee associated with it. If there is a fee, make sure it is accompanied by ample reward programmes like reward points, fuel surcharge waivers or free fuel, air miles, and many more. Therefore, before getting a credit card for oneself, comparing all the reward programmes and privileges and benefits offered by different credit card companies is a prerequisite.

    9. Do credit cards build up the credit score of the users?
    10. A credit score is a count that shows a person’s creditworthiness. The Credit Information Bureau allots this score where the lowest point is 300, and the highest is 900. If an individual has applied for a loan, banks take into account this credit score very seriously. Depending on the credit score, banks decide the interest that should be offered to the applicant.

      Credit card history does influence a person’s credit score because it shows the credibility of the person as a borrower. Therefore, before getting a credit card, one should consider his/her spending patterns, and how regularly can he/she pay off the dues incurred every month. The better the paying behaviour is, the healthier the credit store will become.

    11. What is cash advance and cash limit?
    12. A cash advance can prove to be a great feature in times of emergency as it allows the users to withdraw cash from the ATM using a credit card. The cash advance has a limit which is usually lower than the credit limit. However, interest levied on a cash advance is pretty high and one should really think twice before taking the step and keep the option only as a last resort.

    13. What are the late payment fees on credit cards?
    14. If a credit cardholder fails to clear the outstanding amount, credit card issuing companies levy a late payment fee if the dues remain unpaid for three or more days after the last payment date. This late payment charge depends on the banks and may vary from one bank to the other.

    15. What happens when you only pay the minimum amount due?
    16. To avoid paying any interest charges, cardholders can settle the credit card dues before the last payment date by paying the full amount. However, if one opts to pay just the minimum amount to keep the card active, an interest charge will be levied on the remaining amount due. Therefore, it is always better to pay off credit card dues with the due date.

    17. Are there any hidden charges?
    18. Usually, there are no hidden charges associated with a credit card. However, if an individual is applying for a credit card for the first time, it is for his/her interest that he/she should thoroughly read the statement papers to know about charges and fees associated with a credit card. Although the fixed rate of purchasing a credit card is minimal depending on the company policies, but it is the interest rates levied on the outstanding amount that can prove to be expensive.

    19. Which are the institutions that offer credit card deals in India?
    20. ICICI Bank, State Bank of India, IndusInd, HDFC, RBL, Standard Chartered Bank, Axis Bank, Citibank, Kotak Mahindra Bank, Bank of Baroda, ABN Amro, and American Express are some of the major banks that offer different types of credit cards in India.

      Finally, when the pros and cons have been weighed, one can apply for a credit card which he/she can do either online or by visiting any nearest branch of the bank he/she chose to apply.

      If the individual has taken a loan, then he/she should make sure that the credit score is at least 750 to maximise your chances of being approved. If the score is low, then he/she should take time to improve it before applying for a credit card.

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