Getting your first credit card is a big milestone. It can give you the freedom and convenience of making purchases without cash or a debit card and help you build your credit score over time. But you should know some important things before getting a credit card. In this article, we’ll talk about ten things you should think of before getting your first credit card. We’ll also talk about some of the credit card services offered by most banks in India.
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Make sure you know how credit cards work
Credit cards let you borrow money from a lender to buy things, with the agreement that you’ll pay back the money at a later date. When you use a credit card, it’s like taking out a loan. If you don’t pay it back on time, you’ll have to pay interest, which could hurt your credit score. Every Bank has a variety of credit card services with different features and benefits to meet your needs.
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Find out your credit rating
Your credit score measures how trustworthy you are, and it’s a big reason why you might or might not get a credit card. Check your credit score before applying for a credit card to know where you stand. Several online services, like Credit Karma and Credit Sesame, let you check your credit score for free. Many Banks allow their clients to check their credit scores for free.
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Check out your credit card options
There are a lot of different credit card services, and each has its features and benefits. Some cards give you cash back, while others give you points for travel. Do some research before you apply for a credit card to find one that fits your needs and budget the best. One of the most trusted banks in India, ICICI Bank has a wide range of credit cards with different benefits, such as the ICICI Bank Coral Credit Card, the ICICI Bank Sapphiro Credit Card, and more.
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Learn about the costs and fees
There are often fees and charges that come with credit cards, such as annual fees, balance transfer fees, and fees for paying late. Before you get a credit card, you should know about these fees and charges so you don’t get unpleasant surprises later. Make sure to read the fine print, and if you have any questions, ask the lender. Almost all Banks list all the fees and charges that come with their credit card services on their websites and apps.
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Pick a credit limit that fits your needs
The money you can borrow with your credit card is your credit limit. It’s important to pick a credit limit that fits your budget and your needs. If you’ve never had a credit card before, it’s best to start with a low credit limit and slowly get it higher as you get used to using it. Banks give customers credit limits that are right for them based on their financial history and how trustworthy they are.
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Plan how you’ll pay off your debt
One of the biggest mistakes that people make with credit cards is when they keep a balance and pay only the minimum amount due each month. This can cause a cycle of borrowing money and paying high-interest rates. Make a plan to pay off your credit card balance in full every month before you get one. This will keep your credit score high and keep you from having to pay interest. Banks give you several ways to pay, such as auto debit, to make sure you can pay on time.
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Be aware of the risks of fraud and security
Fraud and identity theft can both happen with credit cards. To keep yourself safe, keep your credit card information in a safe place and check your account regularly for any charges that weren’t made by you. If you see anything suspicious, you should contact your lender right away. One-time passwords (OTPs) and 3D Secure are some of the security features that banks offer these days to protect their customers from fraud.
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Learn how reward systems work
There are rewards programs for many credit cards that give you points or cash back for purchases. Before you choose a credit card with a rewards program, make sure you know how it works, including if the rewards have any restrictions or a time limit.
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Know the perks and benefits
In addition to rewards programs, many credit cards also come with things like travel insurance, purchase protection, and access to airport lounges. Before you get a credit card, you should find out what benefits and perks it offers and decide if they’re worth the fees or charges.
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Be smart about how you use your credit card.
Lastly, when you get a credit card, the most important thing to remember is to be responsible. This means making your payments on time, keeping your utilisation low, and not spending money you can’t afford on things you don’t need. A credit card can help you build credit and keep track of your money, but if you’re not careful, it can also be a trap. By using your credit card wisely and following these tips, you can enjoy the benefits of credit while avoiding problems. Customers of ICICI Bank have access to a number of tools and resources that help them manage their credit card accounts and make smart financial decisions.
Conclusion
Getting your first credit card can be an exciting step toward financial independence, but it’s important to research and understand the risks and responsibilities that come with it. By knowing your credit score, researching your options, understanding fees and charges, making a plan to pay off your balance, and being responsible with your credit card, you can build a strong credit history and stay out of financial trouble. Remember to use your credit card wisely and enjoy the convenience, rewards, and credit card services that a bank has to offer.
