Finding A Beginners’ Credit Card: A Quick Guide !
15 May, 2024
Synopsis
Credit Cards come in various types including travel, premium, virtual and more.
Consider factors like reward programs, card fees, card type and more to find the perfect fit.
Use your card wisely by making timely bill payments, utilising reward programs and more.
Are you looking for your first Credit Card but feeling overwhelmed by the options? You're not alone. With so many card issuers and types out there, choosing a Card for your needs may be challenging. That's why we're here to guide you through the process of finding a beginner Credit Card for you. Whether you're looking for rewards, low fees or just a simple way to start building credit, you can find the best option for your needs and budget.
Understanding the Basics of a Credit Card
A Credit Card allows you to borrow money up to a preset limit to make purchases. It provides a line of credit that you must repay over time. Here are key terms you ought to know:
Credit Limit: Each card has a predetermined credit limit which indicates the maximum amount you can spend.
Interest Rates: When you carry a balance beyond the grace period after the billing cycle, you will incur interest charges also known as the Annual Percentage Rate (APR).
Annual fees: It is a fee charged annually by the card issuer.
Late payment fees: It is incurred when you fail to pay the minimum amount due by the due date.
Foreign transaction fees: It applies to purchases made in foreign currencies.
Types of Credit Card
Credit Cards come in various types, each tailored to meet specific needs and preferences. Here is an overview of the most common types:
Standard Credit Cards
These are suitable for general purchases and transactions. They typically have standard features like a preset credit limit and basic rewards programs. These may also be ideal as Credit Cards for beginners with no credit history.
Co-branded Credit Cards
Co-branded cards are developed in partnership between a Credit Card issuer and a specific brand. They offer rewards and benefits tailored to the brand's products or services. This may include discounts, loyalty points and exclusive access to events or promotions.
Business Credit Cards
These cards are designed for businesses to manage company expenses and separate personal and business finances. They may offer features like higher credit limits, expense reporting and employee spending controls.
Secured Credit Cards
These are some of the best Credit Cards for beginners with no credit history or poor credit history. Secured Credit Cards typically require a Fixed Deposit. The credit limit is usually equal to or slightly higher than the deposit amount which makes it easier to qualify for the approval.
Travel Credit Cards
These cards offer travel-related perks such as airline miles, hotel points, and travel insurance. Plus, some cards also offer zero forex charges.
Virtual Credit Cards
Virtual Credit Cards are digital versions of Credit Cards. These cards are typically accessed through a mobile app and enhance security and convenience for making purchases. For example, HDFC Bank’s Pixel Play Credit Cards offer a complete digital Credit Card experience. From onboarding to card management, you can do it all through PayZapp.
Choosing the Right Credit Card
Selecting a Credit Card requires careful consideration of several factors. Here are key factors to consider when finding the best beginner Credit Cards for your needs:
Rewards Programme: Evaluate the rewards structure, including the point accumulation process and redemption options to ensure they match your spending habits.
Fees and Interest Rates: Compare annual fees, foreign transaction fees and interest rates to minimise costs and maximise savings.
Introductory Offers: Take advantage of sign-up bonuses and other promotional offers. However, be mindful of the terms and conditions.
Credit Score Requirements: Determine whether you meet the credit score criteria for approval and choose a card that aligns with your credit profile.
Card Type: Select a card type that suits your needs. whether it is a cashback card, travel card or speciality card tailored to specific interests.
How to Use Your Credit Card Responsibly?
While you enjoy the benefits of a Credit Card, it is equally important to be mindful of its usage. Explore these tips to use your Credit Card wisely:
Always pay your Credit Card bill in full and on time to avoid late fees and being in a debt cycle.
Stick to a budget and avoid overspending to keep your credit utilisation low and maintain financial stability.
Minimise cash advances as they often come with high fees and immediate interest charges.
Familiarise yourself with the terms and conditions of your Credit Card, including interest rates, fees and rewards programmes.
Maximise the benefits of rewards programmes by redeeming points or cashback for valuable purchases.
Pixel Play Credit Card: An Ideal Credit Card for Beginners
You may consider the Pixel Play Credit Card as a beginner's Credit Card. With Pixel Play Credit Card, you can experience a seamless digital onboarding process via PayZapp. Whether selecting merchants for cashback rewards, choosing a card design or picking your preferred billing cycle date, you can customise the card for your lifestyle and spending habits. The Pixel Credit Card is a completely virtual Credit Card which you can manage via PayZapp. Earn attractive cashback on your choice of merchant payments, swipe to pay for online payments and tap and pay for offline payments. Know more here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Credit Card approvals are at the sole discretion of HDFC Bank Limited. Credit Card approvals are subject to documentation and verification as per the Bank's requirement. Interest rates are subject to change. Please check with your RM or closest bank branch for current interest rates.
