How to choose your FIRST credit card? 6 tips to keep in mind

The key to choosing the right credit card lies in selecting one that aligns with your lifestyle needs. To do so, it’s prudent to explore and compare your options rather than settling for the one your bank suggests. 

There are a tonne of credit card options available on the market today, and each one has amazing features and perks. Consequently, selecting a credit card that fits your lifestyle becomes difficult. Credit cards serve as more than simply a means of payment. When used sensibly, they may become effective tools for budgeting that provide benefits like cashback and airline miles, allowing you to get more for your money.

1. Select according to your requirement

There is no one-size-fits-all credit card. A card that matches your spending style is great. If you love to travel, you should look into credit cards that provide hotel or airline miles. If you enjoy eating out, you may be able to reduce your costs by using a credit card that offers faster rewards for eating out and other recreational activities. A card with cashback incentives might be the best option for a young professional and help you save more money.

2. Check minimum income requirement

Examine the minimal income criteria of the credit card before selecting your first one. You won't want a card with a minimum income criteria that is more than what you can afford right now. Assist in narrowing down your choices.

3. Understand your expenses

Determine the areas in which you ultimately spend the most money. These might include everything from meal delivery services to groceries, petrol and internet shopping. Now, choose a credit card that allows you to make savings on the items you use most frequently. This will assist in reducing the number of cards that are appropriate for you.

4. What are the extra perks?

Many credit card issuers collaborate with physical and online merchants to offer holiday discounts in addition to cashback and points. For example, a lot of cards provide you extra savings when you purchase at particular online or physical places. Find such a card and determine whether it meets your demands.

5. Cashback and other rewards

Credit card companies frequently impose requirements in order to take advantage of a particular deal. The cashback offer is not advantageous for you financially, for example, if your credit card needs you to spend Rs. 10,000 a month on groceries in order to receive a 10% discount on your purchases, even if your actual food expenses may be much lower.

6. Charges associated with the card 

One of the most crucial things to look for when selecting a credit card is the fees and charges that come with it. Check the merchants or businesses that the credit card issuer has partnerships with to make sure you acquire the reward points that are important to you when selecting a card that closely fits your lifestyle. 

Prior to selecting a credit card, it's critical that your monthly spending be well defined. This will assist you in selecting a credit card that gives you enough capacity to pay your bills while letting you keep your credit utilisation ratio far below 30%.