Source: HDFC Bank
7 Common Rules for Your First Credit Card
Credit Cards can be an immense boon when you hit a rough patch financially, giving you the much needed space you require, especially when you need cash for pressing various expenses. Also, Credit Cards can quickly go from being a financially safety net to something that gives you grief at a later stage, if not used wisely.
A ‘first’ Credit Card can be exciting, tempting and intimidating. However, there are Credit Card usage rules that you need to follow in order to reap the benefits that they offer you, without having to deal with the headaches that they can otherwise bring. Here,are 7 common rules to keep in mind before you apply for a Credit Card:
1. Consider the Fees, Credit CardInterest Rates and Benefits: Ideally, the Credit Card that you choose will have the lowest fees, lowest Credit CardInterest Rate and numerous other benefits. There is no Credit Card that will offer you the most of all three. Therefore, you will have to choose between the options, considering your kind of usage.
2. A Credit Card is a serious business: The issuing company is lending you money to pay off your various expenses. After you have used the money, it is your responsibility to pack it back within the given time.
3. One Credit Card is probably enough:If you apply for a Credit Card, there are chances that you will receive many Credit Card offers. However, this does not mean that you have to sign up for each of them. It is very essential to first see if you actually need another Credit Card. If you really do need it, take some time and read through the various benefits that your second Credit Card could offer you. Also, remember that signing up for many Credit Cards is not increases your creditor base but also negatively affects your Credit Card score.
4. Keep the credit limit low: It is very important to know the uses of your Credit Card. Depending on how you are going to use it, calculate an estimated amount and keep the credit limit low. This will prevent you from high usage of your Credit Card in the future.
5. Pay off the entire Credit Card balance each month:The best way to avoid interest charges and build a good credit record is by paying off the entire credit balance each month. When you use a Credit Card, your Credit Cardcompany gives you a few days of interest-free grace. Paying off your balances during this period, will set you free from the interest charges, while also having the ability to rotate your cash for a few days. However, this will only happen if you pay off your balances responsibly each month.
6. Keep the Credit Card active: Even if you are only using the card for emergencies, use it for small purchases every couple of months in order to keep it active. But be sure to pay off the balances before any Credit CardInterest Rate is due.
7. Card Safety & Usage Credit Cards issued by HDFC Bank is Chip & PIN Cards, all transactions done at stores are authenticated using PIN. Online transactions are authenticated using a static password or OTP. This makes the card usage safe. These are a few ways to help a first time Credit Card user keep their credit score good and take precautionary measures to avoid the extra charges. Also, you could do a credit check to make sure that your scores are good and if is, where you want them to be.