October 2, 2024 · 10 mins read
Best Credit Card for Beginners: Top Picks for First-Time Users
Santosh Kumar
Selecting the ideal credit card can be an uphill task for most beginners. With many choices available, picking a card that helps establish one's credit while featuring the best options a user needs is important. If you are at the beginning stages of building your credit or need no-frills credit cards, there are excellent first credit cards for you.
Before diving into the top picks, it’s important to understand why beginner credit cards are essential. A credit card allows you to build a credit history, an important factor in securing loans, renting apartments, or even landing a job. Starting with the right credit card helps you build healthy financial habits, avoid unnecessary fees, and ensure your credit score starts off strong.
Read More:: RBI Guidelines for Credit Cards
When picking which starter credit card to get, here are some details that should help one make the right choice:
1. Low or No Annual Fees: This also allows the beginner not to incur additional costs which they may not be able to incur during this learning process.
2. Easy Approval: Some cards are meant for people who don't have any or minimum credits, so they're easy to be approved for.
3. Credit-Building Tools: Such cards may even provide free services to monitor your credit, offer credit education, or provide incentives to manage debt more responsibly.
4. Low Interest Rates: Ag A card which bears reasonable interest would help you cut costs.
5. Rewards and Perks: While some beginner credit cards do not charge an annual fee, they reward the cardholder for every purchase. Building a credit history has never been this easy, considering how much you would spend to bring such benefits to your credit history.
Read More:: What is the best CIBIL Score
For those new to credit, choosing a card that will help establish a good credit history is crucial. Here's a guide to some of the best starter credit cards for consumers who wish to improve their credit standing and enjoy additional benefits.
SBI SimplySAVE Credit Card is one of the most significant entry-level cards for freshers in our country. This card is very good for those people who wish to earn credit by spending and still getting rewards on normal purchases. Purchases made in dining, groceries, movies and department stores will earn you 10x reward points. You also get spoil as a welcome benefit of getting ₹ 2000 reward points where you will need to spend ₹ 2000 within 60 days of that offer. Also, there is an annual fee on the card of ₹ 499, but it can be waived if such a level of spending is done in a year exceeding ₹ 1,00,000. SBI also provides interest-free credit periods of up to 50 days, which also gives one enough time to plan and settle payments without incurring extra charges.
For entry-level users, the ICICI Bank Coral Credit Card is yet another brilliant option, mainly for those who need to manage their credit card with less effort yet want to enjoy more benefits. This card can be fairly useful to people who have a restricted credit limit because it does not place a high-income criterion. It offers 2 payback points against every retail transaction of ₹100 and also gives exclusive dining and movie ticket offers. They can enjoy 1 free visit to the airport lounge every quarter, which is beneficial for all the fliers out there. The card is associated with an annual fee of Rs.500, which can be cancelled if Rs.1,50,000 is spent in a year.
Read More:: Credit Card Against Fixed Deposit
The HDFC Moneyback Credit Card is designed for customers who like to keep it simple and earn rewards at the same time. This credit card appealed very much to the leaders of the Indian credit card market thanks to its simple use and the cashback feature. Multiplying your earnings, you receive 2 reward points for every ₹150 spent and 4X reward points for spends made online. Since these Benefits Can Be available as Cash, it comes especially handy for new users who want to take full advantage of cash back on almost all purchases. It is Rs 500 at the annual fee, which can be exempted at an annual total spending of Rs.50,000.
ZET App also has a secured credit card magnet that hosts creditworthiness features and offers attractive benefits to users. Magnet is aimed at those who have either no or a low credit score and is a secured credit card where a fixed deposit of an amount between ₹5000 to ₹25000 is opened, out of which 90% is utilized as the credit limit. Unlike some credit cards that come with an annual or renewal fee, this one is offered at no cost. They help users save their fixed deposits and, unusually, provide credit improvement, as users get up to 7% interest on their deposits. The magnet also has to join offers up to ₹21,000 in which brands, OTT, Travel deals and many more offers are available at discounted vouchers. Easy to use and available for instant approval even in the case of poor credit history, Magnet is aptly for all users to earn or repair the CIBIL Score as well as money in return.
Though all of these credit cards are great options for first-time users, it is essential to select the card that is suitable for their situation. The following are some of the things to keep in mind:
1. Your Credit Score: For those with no credit history, such as students, secured cards like Discover it® Secured or Citi® Secured Mastercard® may be the way to go. If you have fair credit, the Capital One Platinum Credit Card or Petal® 2 Visa® would be a much better option.
2. Your Spending Habits: Are you a student? Then, cards like the Chase Freedom® Student Credit Card are ideal since they reward you for simple needs. But if your primary goal is to raise your score without charging card fees, Petal® 2 Visa® could best suit you.
3. Rewards or No Rewards: While some beginner credit cards are designed to enable you to earn back some perks and have some monthly or annual bills, some are aimed at credit building without any incentives. Decide whether earning rewards is worth your effort or you will just want to keep everything elementary and INVISION-free.
4. Security Deposit: Most secured credit cards require a deposit from the borrower. If you have cash and want to extend your credit, that is a secured card for you. But if you don't want to make a security deposit, you may want to look at other options, like the Petal® 2 Visa®.
Read More:: Minimum CIBIL Score Required for Credit Cards
Getting approved for your first credit card is exciting, but it is important to learn how to use your card responsibly so that it does not ruin your chances of obtaining a loan someday. To assist you in this task, we have compiled some ready options for you to make the most of your first credit card experience.
1. Pay Your Balance in Full: As much as possible, pay off your balance in full each month to the extent that it is reasonable. This will help you avoid interest and improve your credit card behaviour.
2. Limit How Much Of Your Credit You Use: Try making utilization below 30% of your total available credit. For instance, if your limit is $1,000, do not carry a balance above $300.
3. Pay Your Bills Within The Deadline: Payment history is one of the most important factors in determining credit score. Automatic payments or reminders will keep you from forgetting due dates.
4. Even If You Do Not Use The Card, Track Your Credit Score: Moreover, many credit card companies offer free credit score monitoring services. Watch your score and work on getting better than that.
5. Do Not Apply For Many Cards: Each time you apply for a new credit card, you increase the chances of an undesirable factor called a hard inquiry, which can negatively affect your credit score for a short time. Do not apply for the ones that are not so important to you.
Read More:: What is the minimum credit score needed for a credit card?
It's not that hard to look for the right credit card as a beginner. You will have an easier time applying for credit in the future because you picked the right type of card, either a secured card or a student card with perks. It is important to bear in mind that establishing your credit will take time and stability, so ensure you make timely payments, maintain a low balance and check your credit score frequently. Approach this task well; you will have a good credit history and constantly improve your credit standings in the coming days.
Moreover, it should be kept in mind that credit is not a sprint. It may take a while to see changes in your credit, but it will get there with dedication. This also implies that paying too much attention to one's credit card is unwise. Payments of small valued goods which can be afforded at a particular time are more favourable to a credit score than the purchase of expensive luxuries that are not paid for. Finally, even if it's a secured card or one with any or fewer perks, good credit behaviour will help you qualify for better cards down the road.
You should explain all the various applications for hard or soft inquiries. This is a concept that needs realistic appraisal. Many individuals contend that applying for too many cards within a short duration can injure one's scores. Try not to get more than one or two cards under your name before you apply for more. If you wisely and logically follow the steps and guidelines for credit management, it progressively gets easier to attain a good credit status.
What should I consider while looking for the first card?
When choosing a credit card for first-time users, look for features like no or low annual fees, ease of approval (especially for those with no credit), lower interest rates, and tools to help improve one's credit. Some of them include cash-back rewards extended to first-time credit card owners.
What is the difference between secured and unsecured credit cards?
It is much easier to get a secured credit card because it is backed up by a partially refundable security deposit that serves as your credit limit. It is appropriate for those with no credit. Unsecured cards have no initial deposit requirement, but they are given based on the applicant's credit score.
What steps should a customer take to be most likely granted a card?
To increase your chances, check your credit score, apply for beginner-friendly or secured cards, keep credit utilization low, and make payments on any outstanding active accounts to show repayment habits.
Is it really essential to look at rewards when looking for a credit card for beginners?
Rewards are helpful but not important for beginners. The main goal should be finding a card that you can use to build credit without incurring high fees or interest rates. Rewards are a good addition to the equation, but credit management should be the focus.
How long will building my credit using a beginner credit card take?
It usually takes about six months of responsible credit card use before one notices any changes in one's credit score. Making regular, timely repayments and keeping low balances will provide an effective way of building credit.
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