Best Credit Cards for Beginners: A Step-by-Step Guide:
A detailed guide for people getting a credit card for the first time
Are you thinking of getting a credit card for the first time? This is a big financial decision, and if your credit score is not good, you have to be a little careful. But if you understand your financial habits and apply after choosing the right card, then you can get a lot of benefits from a credit card.
In this guide, we will explain to you the basic things related to getting a credit card, so that you can make your financial journey easier. We will also tell you which credit cards are best for beginners, so that you get a smooth and safe experience.
Step 1: Understanding the Basics of Credit Card
First it is important to understand how a credit card works.
Credit Limit: This is the maximum amount you can spend from your card. For example, if your credit limit is ₹50,000, you can shop up to ₹50,000. But, also keep in mind that the more you spend, the more interest you may have to pay if you do not pay the full balance.
Interest Rate (APR): APR or Annual Percentage Rate tells you how much interest you will be charged if you don’t pay your credit card bill on time. The more you carry your outstanding balance, the more interest you will have to pay.
Fees: There are different types of fees on credit cards, such as:
Annual Fee: A specific fee you have to pay every year, which is free on some cards and charged on some cards.
Late Payment Fee: If you don’t pay your bill on time, you may be charged a late payment fee.
Foreign Transaction Fees: If you shop overseas, you may be charged this fee as well.
Step 2: Understand your financial situation
Before getting a credit card, it is important to know your financial situation.
Credit Score: Your credit score tells how reliable your credit history is. If your score is around 650, you can get beginner-friendly cards. If the score is low, you should also consider a secured credit card.
Income: Credit card companies also evaluate your income when you apply. If your monthly income is stable, you have a higher chance of getting a credit card approved.
Spending Habits: What type of expenses you make is also important. If you shop or travel daily, you will need cards with rewards and cashback. If your spending is low, you can choose low-fee or zero annual fee cards.
Step 3: Best Credit Cards for First Users
Choose cards which are simple and have low fee charges and reasonable interest. Here are some of the best credit cards for freshers:
- HDFC Easy Shop Credit Card
Annual Fee: ₹500 (free for the first year)
Interest Rate (APR): 13% – 38%
Benefits:
Cash back on shopping.
No cost EMI is also offered.
10% discount in dining and movie tickets.
Best For: If you shop regularly, then this card is best for freshmen. - ICICI Platinum Chip Card
Annual Fee: ₹199 (waived for the first year)
Interest Rate (APR): 3.40% per month (min)
Benefits:
You get rewards on shopping, dining and bill payments.
Chip technology has a secure transaction mode.
It’s free for all types of insurance benefits, including air accident cover.
Best For: Those who look at a simple, secure card which also dispenses rewards can go for it. - SBI Simply Save Credit Card
Annual Fee: ₹499 (free for the first year)
APR: 3.35% per month
Benefits:
5X rewards points on dining, groceries, and department store purchases.
Movie ticket discounts.
Easy EMI conversion option.
Best For: This card is for those people who want to earn rewards points on daily expenses. - Axis Bank My Zone Credit Card Annual Fee: ₹500 (waived off on ₹30,000 annual spend). Interest Rate (APR): 3.50% per month. Benefits: Discount on movie and dining. 5% cash back on popular portals like Amazon, Flipkart, etc. Fashion, travel, and lifestyle-specific discounts. Best For: This card will suit you the most if you shop online and dine out often.
- Amazon Pay ICICI Credit Card Annual Fee: ₹0 Interest Rate (APR): 3.49% per month. Benefits: 5% cashback on Amazon.in purchases for Prime members.
3% cashback on other Amazon purchases.
2% cashback on bill payments, mobile recharges, etc.
Best For: If you shop a lot on Amazon, then this card will give you excellent cashback rewards.
Process of Application Step 4: How to Apply for a Credit Card
Now that you have chosen the right card for yourself, let us understand the process of applying for a credit card:
Eligibility Check:
When you apply for a credit card, you should first ensure that you qualify for it (age, income, credit score, etc.).
Documentation preparation
You have to submit some documents, like identity proof (Aadhaar card, passport), address proof, income proof (salary slip, bank statement), and photograph.
Submit Application :
You can apply online or in any bank branch
Approval & card delivery
If your application is approved, the card will be sent to your registered address.
Use of the Card
When you receive a card, it is imperative that you use responsibly. Pay the bills on time, and do not exhaust more than 30-40% of your credit limits.
Step 5:Tips to Use Credit Card
Pay on time. Paying the bill on time can save you charges.
Spend less than 30% of credit limit. If you spend more, your credit will go in negative.
Avoid minimum payment. If you make minimum payments, then it increases the interest amount. So, paying the full amount is worthwhile.
Use of Rewards: Collect all your reward points possible and use them wisely, free shopping, air tickets, etc.
My advice:
If you are getting the credit card for the very first time then it is quite essential to be careful choosing the right card and using it wisely. You can easily get your very first credit card by following the steps as above and make your financial future safer.
This way, using a credit card responsibly affords you lots of flexibility in finance, it offers rewards, and it actually increases your credit score.