What Should You Know Before Applying For The First Credit Card?

When you decide to apply for a credit card, it is a huge milestone. However, your first one is as big an adjustment as a milestone. Even if you know what a credit card is and how they work, the fact lies within the minute details. If you are keen to apply for your first card, there are some facts you should know about before signing the dotted lines.

They are as follows –

It either builds or ruins credit score

If you apply credit card online or offline for the first time, you must be extra careful with your credit card activities. Your issuer reports any negative activity to the bureaus, who play an essential role in compiling your credit reports, thereby offering you ratings. Simple habits like paying monthly bills on or before the due date, paying the outstanding amount, etc. help to keep your credit score under check.

Can pay more than the minimum

Many pay their credit card bills online and opt for the default pay minimum option. It is a good practice to pay more than the minimum amount you owe for the month. Paying lesser now means you end up paying more.

Delayed payments can cost you

One thing you must avoid entirely when it comes to an offline or online credit card is missing the due date. Nowadays, you can apply for the cards online and track payment amount, due date, and recurring bill cycle as well. It is in the card holder’s best interest to always pay on or before the due date, even if it is a minimum amount.

Do not get too close to the credit limit

Your card limit gets decided based on your annual earnings, credit history, outstanding debts, and ability to pay the amount. However, the more close you get to your credit limit amount of your card, higher are the chances of your credit score sinking. Your utilisation ratio should not be higher than your ability and the amount you pay.

Ask for the reason of rejection

If you get denied the credit card, remember to ask for the purpose. The credit card issuer will always tell you why and on what grounds the application got rejected. From your credit score is too low to lacking credit history, the reason for rejection is multiple. You can always ask for feedback for improving your chances of approval the next time you apply.

Over the years, banking services have evolved. Banks have become digitally accessible to people across the world. When you decide to apply credit card online, make it a habit to track the transactions, online payments, and keep an eye on your credit card limit.

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