Things to Keep in Mind while Getting Credit Card for the First Time


The acquisition of your first credit card is both a watershed moment and a period of profound change. You may have an idea of how credit cards function. You must also know how to use one properly. The time and resources you save and the interest you avoid by learning the ins and outs before you start building credit will more than pay for the effort.

Your first credit card will have a big impact on your credit history. As long as you use it responsibly, that impact can be very positive. Credit cards let you afford the basics, like everyday expenses. They can earn you rewards when you charge and help you qualify for lower interest rates on loans.

Eligibility for Owning a Credit Card 

  • You must be a legal resident of India and hold a valid Indian passport.
  • A minimum of six months of regular employment
  • A credit history of at least 700 is required.
  • A monthly income of at least INR 20,000 is required.
  • You must be at least 18 years old.
  • Details of your source of income.
  • New applicants who have trouble with the above points may want to start with a secured card
    • A secured card is issued against a fixed deposit for 80% of the deposit’s value.
  • First-time credit card users with limited or unproven income may find the security of a secured card to be the most reliable option.

Credit cards are a handy method to shop. They also help in gaining rewards. It is advisable to use a credit card for immediate needs. Making a monthly budget that you know you can stick to will prevent you from getting into financial trouble. The 50/30/20 budget advises allocating half of the income toward housing and food expenses, thirty per cent toward urgent payments, and twenty per cent toward savings and debt repayment.

Points to Remember While Getting a Credit Card 

Distinct credit card varieties

You must have a thorough understanding of the various credit card options available in India. You can get a credit card with a low annual fee if you are just starting, for instance. Plus, there are a variety of credit cards to choose from. These include those specifically designed for travel, shopping, cash back, fuel, etc.

Source of income 

Credit card companies typically need proof of income as part of the application process. In the credit card application process, your salary is a major factor. This demonstrates to the card issuer that you have the financial wherewithal to settle your monthly credit card balance. As one’s disposable income rises, so do the available card options.

Initiate with a low credit limit

Credit card companies typically give you a modest credit limit at first to reduce their risk. Credit card companies typically provide an increased limit after you’ve demonstrated responsible use of your card. Your income is factored into your credit limit, so if you make a low salary, you may have a lower credit limit.

Terms and conditions for use of credit cards

You should read the terms and conditions carefully because they contain vital information regarding the card and your use of it. Please familiarise yourself with the card’s APR range, fees, reward structure, and other important data.

Function of Interest

If you pay off your credit card amount in whole and on time, it’s like the bank gave you free money. However, if you don’t pay off your debt in full each month, interest will be added to your account at the annual percentage rate (APR) that applies to your particular credit card. The typical annual percentage rate is between 30% and 40%.

How does the grace period function?

If you pay off your new balance in full by the due date, the issuer will not charge you any interest on the purchases you made during the grace period. Payments are given a bit of leeway between the end of the billing cycle and the following one. If you fail to pay your bill in full by the due date, you will be subject to interest charges.

Credit card fees

Verify that you are aware of all of the significant costs associated with using the card. Joining costs, yearly fees, loan charges, transfer fees, cash advance fees, foreign transaction fees, over-limit fees, and more are just some of the items you need to keep an eye on. Get familiar with all of these figures before you incur any unanticipated fees.

Late payment fees

You should be aware of the possible late payment fee that may be applied if you pay off your debt later than the agreed-upon due date. If you’re late with a payment, not only will you have to pay late payment fees, but your creditors may also record the late payment to the credit bureaus. This can have a negative impact on your credit score.

Keep a check on the spending limit

It’s important to monitor your expenses no matter how high your credit card limit is. While a solid repayment history will help your credit score, a high utilisation ratio will hurt it. If you spend more than 30–40% of your available credit on your cards, your score will suffer as a result since you will be seen as a higher risk when it comes to paying off your obligations.

Realise the impact of credit cards on your score

Your credit card decisions and debt repayment will affect your credit score. Credit cards can hurt your credit score if you use too much of your available credit.


Even though it’s an important first step, applying for a credit card isn’t easy. You should learn the Dos and Don’ts of how a credit card operates. Also, study the fine print before using one. It’s smart to weigh the benefits and negatives of each option. Doing so can help you save money and improve your credit rating.

For more details on credit cards and their process, you can visit the Piramal Finance website and get assured assistance.