Things You Should Know Before Getting A Credit Card

Most of the banks flood you with messages and marketing calls for applying for a credit card. Some banks even give it on a complimentary basis when you open an account with them. A credit card is a form of plastic money that you can use for purchasing things or at the time of emergency. Instead of drawing money directly from your account, the money is deducted from the credit balance of the credit card.

As most of the credit cards come with credit limitations, you have the liberty of paying off the generated bill in one go or on a monthly basis. It is indeed helpful when you are out of cash or have limited funds in your account. However, there are a different set of credit cards, and there are specific guidelines based on which they are issued to you. Besides, there are few things that you need to consider before you apply for a credit card.

Secured or unsecured credit cards

A credit card is a sort of a loan that you take from the bank again and again and have to repay it back. Therefore, the credit card is not at all free money, and you voluntary take responsibility for repaying everything that you borrow. This type of credit card is usually known as an unsecured card, as the loan provided to you is not secured by any collateral. These cards are generally not issued until you have a credit history. There are chances that you might be denied an unsecured credit card. Some banks do issue secured credit cards to people with no credit history but only against a security deposit.

Your credit limit

The credit limit of the card is the amount of loan that the bank is willing to grant you. It is also the maximum amount of money you can charge to your credit card on each cycle. It can range from a few thousand rupees to a few lakhs, as well. If it is your first credit card, the credit limit will be low as you have not proved your worth to the bank yet.

Opening deals you can get

Some banks offer you incentive plans when you take a credit card from them. Right from providing you a certain amount of leverage on credit, there are other plans also that they offer you. Therefore, it is essential that you go through the fine print before sign the deal. It is because these deals require you to spend some amount of money on the credit card within a set period of time after activating it.

Minimum payment

When you get your credit card statement, you shall find a minimum payment due. The amount generally is between 1% and 3% of your entire balance. The minimum amount is what you pay without the need of paying any late fee or damaging your payment history. However, the unpaid amount will be carried over to the next month’s bill and paying it as soon as possible eases your credit score and limit as well.


There are also some reparations that you have to face if you don’t pay your credit card bill on time. It is quite evident that you have to end up paying interest on the money that you have owned, meaning you will have to pay a lot more than the actual amount. Your credit score is the thing you have to consider if you are not paying bills timely, as it will get negatively affected. It can reduce your credit score and can even hurt your chances of getting other bank’s credit cards, mortgages, and big items with the help of your credit card.


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