Credit cards are essential tools that offer various benefits, such as building a good credit history and earning rewards on everyday purchases. They are widely used in India and have become a necessity for managing finances in today’s fast-paced life.
Credit card providers evaluate a person’s creditworthiness by considering various factors, such as credit score and income. One of the simplest ways to apply for a credit card in India is through the OneCard app. However, with a vast amount of information available, out there, and the financial industry being complex, understanding credit can be challenging.
This article has mentioned the top ten things you should know about credit scores and credit cards in India. Continue reading to learn more about how a credit card works.
Your Credit Score Matters:
Your credit score is a crucial factor. A higher credit score means higher chances of getting a credit card approval, higher credit limits, and lower interest rates. You should maintain a good score before you make the application.If you are new to credit, you can go for secured credit cards that need you to create an FD to get a credit card.
Annual Fees And Other Charges:
Typical credit cards come with several costs and fees, such as annual fees, late payment fees, and cash advance fees. It is crucial to understand these fees and expenses before applying for a credit card. It is advisable to opt for a credit card with affordable fees, including little or no annual fees.At OneCard, we offer credit cards with zero joining and annual fees.
Credit Cards Come With Rewards Programs:
Research the rewards and benefits provided by the credit card you are considering. Many lenders offer cashback, while others provide reward points that you can redeem for flights, travel discounts, or other perks. Make sure that the card you select offers rewards and features that align with your spending habits and lifestyle.
Credit Card Debt Can Be Costly:
Credit card debt can quickly become a financial burden if not managed well. While paying the minimum amount may seem feasible, it can lead to higher interest fees in the long run. Hence, it is crucial to have a solid plan to pay off your credit card bill promptly. A well-planned approach can help you avoid significant financial stress and improve your financial stability.
Choosing a Reliable Credit Card Issuer:
Selecting a reputable and trustworthy credit card lender is crucial when applying for a credit card. Look for the best credit card apps available in India and choose the one that suits you right. Go for a lender that provides credit cards with affordable annual fees, high credit limits, and various rewards and perks.
Understanding Credit Limits on Credit Cards:
Credit cards have varying credit limits, which determine the maximum amount you can spend using the card. Your credit score, annual income, and credit history typically determine this limit. Going above your credit limit may result in fees or penalties. To avoid these costs, it is important to monitor your spending and stay within your credit limit.
Purchase Protection Benefits of Credit Cards:
Credit cards can provide customers with purchase protection benefits. These benefits might cover the costs associated with damaged, lost, or stolen things after purchase. This insurance normally has a time limit of 90 to 120 days after purchase. Various credit card companies may have varying terms and restrictions for purchase protection.
Understanding Credit Card Interest Rates:
The interest rates might vary and depend on the terms and conditions. Your creditworthiness and the sort of transactions done on the card matter. There are certain cards that offer a lower interest rate for a limited time, but others that charge a higher interest rate. To prevent paying hefty interest charges over time, comparing interest rates and selecting a credit card with the lowest interest rate is necessary.
Caution When Using Cash Advances on Credit Cards:
Credit card cash advances might be useful for immediate cash in an emergency. However, they have hefty interest rates and other costs associated with them that can soon pile up. Therefore, using this facility cautiously and only when essential is critical.
Credit Cards Offer Fraud Protection:
Credit card lenders have systems to detect fraudulent activity on your account. You must notify your lender if you become aware of any unauthorized transactions. The issuing company will investigate and compensate for the damage.
Applying for a credit card in India can be a wise financial decision if you understand the costs and rewards involved. By keeping these ten points in mind, you can use the top credit card apps and select a card that aligns with your spending habits and requirements. Remember to use your credit card responsibly to establish a good credit history and improve your overall financial well-being.