Applying for credit card can be a daunting task when we have hundreds of available options.
You need to thoroughly understand how a credit card works before applying for any. In the past couple of years, the Reserve Bank of India (RBI) has focused on strengthening IT resilience for all the banks with millions of credit card holders.
Meanwhile, the Reserve Bank of India (RBI) has imposed strict restrictions on India’s third-most valued private bank Kotak Mahindra Bank from issuing new credit cards. RBI mentioned: “The bank is found to be materially deficient in building necessary operational resilience on account of its failure to build IT systems and controls commensurate with its growth.”
Credit cards are powerful financial tools to get numerous benefits when used rationally. In this article, we will discuss about important things to check before getting a new credit card.
and rewards in detail. Invest your time to get the best deals for you.
Your income plays an important role behind getting a suitable credit card. The issuer will ask about this first to check your repayment capacity. With rise in income, you will be able to get a higher credit limit too.
The confusion starts from here. There are hundreds of credit cards available in Indian market by different banks. The famous categories are shopping credit card, travel credit, fuel credit card, cashback credit card, and so on. You must choose the card based on your requirements. If you are applying for your first credit card, opt for beginner-level card which has a low annual fee.
If it's your first credit card, choose a card with low credit limit. This will help you learn how to efficiently use it. Let's be honest, if you are young and get a credit card with higher limits, it will be misused. The companies review your expenses and offer you higher limit every financial year.
It is another crucial thing to check before applying for credit card. Go through the applicable fees, Annual Percentage Rate (APR) range, and rewards in detail. Invest your time to get the best deals for you.
 range, and rewards in detail. Invest your time to get the best deals for you..webp)
Ensure checking all the fees and charges related to the credit card. This includes annual fee, joining fee, transfer fees, finance charges, foreign transaction fees, and over-limit fees. Once you get those numbers, you can easily compare between cards and choose the best ones. Also, you won't be burdened with unexpected charges every month.
If you miss the payment date, you have to pay the penalty. We cannot predict any disaster. So, knowing the penalty amount will surely help you plan your finance in a better way.
Well, there are numerous misconceptions about credit cards. Many people think that majority of fraudulent activities happen through credit cards. If this is stopping you from getting your first credit card, you are doing a big mistake. Let's try to understand, the money is not yours, this is borrower’s money. Thus, credit cards offer more protection than your debit card.
Credit card is one of the best ways to build your credit. After every month, the issuer submit report about the customer to the credit bureaus. If you spend and pay wisely, your credit score improves.
Understanding these things will help you build a good credit score.
