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1. Build your Credit Score

2. Reduce your Current Borrowing / EMI Costs

Thinking about getting your very first credit card? That is excellent! A credit card allows you to get loans from banks whenever you want. It doesn't matter where you are or what time of day it is. Besides, you get a lot of benefits depending on the type of credit card. Free airport lounge access, anyone?
However, at the end of the day, one still needs to use one’s credit card responsibly. Loans need to be paid back on time, whether you are paying back in a lump sum or in EMIs.

Where Can I Get a New Card?

That being said, let us come back to the subject - you want your first credit card! Let’s find out the sources from where you can get it.

Your own bank: Your bank will always be interested to give you a credit card since you have a savings or checking account with them already.
Credit cards that require no credit history: Set aside some time to find out this variety of credit cards, for they are worth it. Banks offering such cards won’t ask for your credit history. These are called ‘limited history credit cards.’
Secured credit cards: When it comes to collateral, there are two kinds of credit cards: secured and unsecured credit cards. In the case of secured credit cards, the loan is secured against a deposit. Unsecured credit cards are just the opposite - they require no collateral. Therefore, it is less risky for banks in the case of secured credit cards. Thus, you can get these with comparative ease.
Retail and store cards: You can qualify for these easily. However, you also need to remember that there are a few downsides to using these. Retail cards and store cards charge high-interest rates. Furthermore, these can be only be used in case of a specific brand.
Cosigners: You can get your first-ever credit card with cosigners’ signatures. Many banks allow you credit cards if your parents, guardians, or others are your cosigners. You will get the card depending on your eligibility. However, do remember that cosigner’s credit score will be affected by how you use the card.
Now that you have understood from where you can get your first card, let’s see how you can get one.

Getting Your First Credit Card

Are You Ready?

To get your very first credit card, that is. You may feel very excited at first. Credit cards are commonly looked at as status symbols. They also bring you a slew of genuine benefits that can’t be ignored. However, at the end of the day, you need to use them with care and responsibility. You have to keep track of your spending through the card. You must remind yourself of credit card EMIs. Banks can remind you as well, but it is likely that they will charge you for the same; not to mention fee charges, interest payments, and other charges. Besides, not paying on time seriously affects your credit score.
Getting a credit card and using it is not the end. It is also your responsibility to know about the relation between credit score and credit card. You owe this knowledge to yourself. After all, your credit score will be directly influenced by how you use the card. If the credit score drops too low, you may not get any new loans at all! When you are starting out with your first credit card, you don’t want a negative mark on your credit score when you don’t even have a credit history to back you up.

Start Applying

The next step is to prepare for the ground realities that come after getting a credit card. You may be a college student who just got a card. However, this is mostly because banks make it easier for students to get credit cards. The problem is that most of the youngsters are more prone to fall into debt. When this happens, their credit score gets a beating for the long term.
In India, you can get a credit card if you are 23 years old. This is the minimum age for getting this financial product as recognized by most banks. There are some banks that offer you credit cards to students of 21 years of age. However, for these cases, the applicant needs to have an exceptionally good financial score, along with a minimum monthly salary of 20k.
For first-timers, limited credit history can be a serious roadblock. However, that has nothing to do with age. You will still face this difficulty even if you are applying for your first credit card in your 40s.

Once You Have a Credit Card...

Pay on Time - Consistently

After getting your first credit card and taking out your first loan, you need to pay on time. For this, you also need to know why the Credit Score is important, and why paying on time is essential.
Your payment history is the most important determinant of the credit score, determining 35% of it. Your payment history refers to your recurring debt repayment habit.
You don’t want to be late in payments. If you are, additional penalties can be charged by the bank, which results in monetary loss. Besides, your credit score falls as well.

Don’t Bite off More Than You Can Chew

An important rule that you should always adhere to is you should not take loans through credit cars, or through any other means, if it is hard for you to repay them. There are so many products that may be alluring: a dream home, a dream vacation, etc. But it is prudent to take only loans for those that you can repay with ease. 

Pay Attention to Your Credit Utilization Ratio

Your amount owed is a big factor in the calculation of your credit score. Amounts owed covers 30% of your credit score, and show the debts from all your accounts. Money owed relative to the total credit limit shows your credit utilization ratio. A high credit utilization ratio means that you have lots of debts. It is best to keep the ratio below 30%.

Check Your Credit Report

You may want to check how you are managing your credit card. For this, you need to check out your credit report. You can get this from the three major credit bureaus namely Experian, Equifax, and TransUnion. They each give you one free report a year, after which you have to pay a fee for the same. 

You can also check your credit report for free with mymoneykarma. This can be really helpful, as it is better to check your report at least twice a year for any errors. If there are any, report it to the concerned credit bureau immediately.
 

With these tips, you will be well on your way to getting a credit card and keeping it.

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