First credit card? Here’s your ultimate step-by-step guide to getting started

Credit cards are crucial for Indians, offering easy access to credit and helping build a strong credit history. The total number of credit cards in India is projected to grow and reach 200 million by FY28-29, growing at a CAGR of 15% according to a report by PwC.

Over the last five to six years the credit card industry has doubled its issuances and this trend is expected to continue. Still, credit card usage has declined due to the popularity of UPI and less lucrative reward programs.

Regular, responsible use enhances credit scores, leading to better loan terms and financial opportunities. With digital transactions rising, credit cards remain a vital tool for financial management and growth in India.

Therefore, in such an environment applying for your first credit card can be an exciting experience with so many to pick out from, here in the Indian market. A credit card is not just a great tool for managing finances but a step forward towards building your credit history. This is a step-by-step guide to assist you through the process and help you make intelligent decisions.

You must know how to use a credit card, its significance, associated costs, credit utilisation ratio and have all the papers ready for a hassle-free application process. Follow these five simple steps to begin:

Eligibility requirements

Ensure that you fall under the issuer’s eligibility criteria before applying. You must be at least 18 years old, possess a regular source of income, and have a good credit score along with good credit ratings. For new credit customers, even secured credit cards are available from some banks against fixed deposits. Keep your documents like your PAN card, Aadhaar card, and proof of address or income handy to be submitted.

Picking the right credit card

Credit cards vary with offerings such as cashbacks, travel points, or low annual fees, offerings here are mostly dependent on your lifestyle needs and aspirations. Make a list of your expenses and financial goals so as to select a card most ideal for you. Regular travellers, for example, would appreciate cards offering lounge passes complimentary and travel cover, whereas shoppers prefer cashback or reward cards on making digital purchases.

Compare rates, fees and rewards

Compare interest rates, reward programmes, yearly fees, and payment terms of the cards very carefully. Avoid hidden charges like late payment fee or foreign transaction fee that can drain your wallet over a long period of time. Some cards also offer introductory offers like no annual fee for first year or welcome bonus, accept them if they are according to your needs.

If in doubt always reach out to the respective customer support division for complete clarification before going ahead with the application. You should be in touch with the card disbursing institution at all times during the application process submission of your first credit card.

Complete your application without errors

The banks provide digital apps for your convenience today. Just log in on the bank’s website or app, chosen by you, provide your details, and get video verification completed for digital KYC. You can enjoy instant usage with a virtual card upon approval and until the physical card reaches your doorstep.

Importance of using credit card responsibly

The minute you receive the card, use it wisely to earn well in the credit market. Do understand that your credit profile is deeply linked with your integrity, will and clear exhibition of timely repayments. Pay bills before due dates and never cross your repayment limit.

As would be suggested by the one of the best investors of all time-Warren Buffett, “Do not save what is left after spending; instead spend what is left after saving.” To be economical with money will bear fruit in the long run such as better loan terms and higher limits. Therefore always be prudent and careful with credit and use it only when you have no options left.

Finally, the first credit card spending is a significant milestone in the journey of financial independence. Knowing how to do it and being responsible when using your card, you are capable of achieving numerous benefits and building a healthy foundation for your finances in the future.

(Note: Using a credit card carries its own set of risks.)