5 Things to Keep in Mind for a First Time Credit Card Holder

In today’s fast paced world, Credit Cards solve a lot of transactional and financial problems.

They simplify not just our financial lives but also provide numerous other benefits like discounts, cashback, redeemable loyalty points, ability to buy-now-pay-later, and so on.

If you don’t possess a Credit Card, you should definitely consider getting one.

1. What is the best way to pay off my Credit Card debt?

Research has shown that most people use less effective ways to pay their Credit Card debts.

For example, most people use Balance-Matching Method:

• The monthly amount you pay per card is in proportion to the total amount you owe on that card. In this scenario, you end up paying a large amount of interest on the outstanding amount.

One way to efficiently pay your Credit Card debt is the Avalanche Method:

• This involves listing your debts from highest to lowest, based on their interest rates and pay the minimum balance on each
• Thereafter you may dedicate to pay down additional balances – always pay down balances with the highest interest rate first.

2. How can I cancel my Credit Card?

Tracking payments, dates and annual maintenance can be difficult if you are a multiple Credit Card user. I am sure you have thought about cancelling some of your Cards!

Cancelling a Credit Card that has been in regular use may have a negative impact to your credit score. Maintaining a Credit Card improves your credit score if you clear the outstanding balance on time. However, it may not be wise to cancel a long-standing Credit Card if you wish to apply for a new loan.

Here are the steps to cancel your Credit Card:

• Firstly, pay off all outstanding dues on your Credit Card.
• Next, fill in a Credit Card cancellation form provided by the Credit Card company. Pay down your outstanding balance before or at the time of cancellation.
• On receiving the cancellation request and clearing all dues, the Credit Card issuer will cancel your card and inform you.
• As soon as your card is cancelled, destroy it by cutting it into small pieces.

3. What is the minimum salary amount to get a Credit Card?

If you are applying for a Credit Card for the first time, every Bank/Credit Card issuer considers several factors like your income, credit score, employment duration, employer and so forth. The salary requirement for a fresh Credit Card varies from one card provider to another.

For instance, if you have a good credit score (750 or above) and you’re Applying for a Citibank Credit Card, the minimum salary requirement is – 20,000-25,000 (depending on your employer).

In case you don’t have a credit score, you can still apply for a Credit Card if your monthly income is at least 30,000.

You can Apply for a Credit Card Online without your company being on the pre-approved list. If you are applying offline, your employer should be pre-approved.

However, even if you are eligible for a card by meeting the minimum salary requirement, your application could be rejected if:

• The Pin Code of your address falls under the ‘no-go’ areas as per internal bank policies
• You don’t have a CIBIL score
• The official email address provided by you is invalid

4. Are there any demerits of using a Credit Card?

Credit Cards are very useful as they come with various benefits. However, their sensible use is advised else, you may have to bear heavy interest cost or penalty. Clear your dues in a timely manner and don’t default on payment.

5. What does Credit Card APR mean?

The APR (annual percentage rate) is the cost of interest that you will have to pay annually on your Credit Card Balance. APR can be used to compare different Credit Cards.

However, it doesn’t mean that a lower APR promises a better Credit Card. Credit Card providers compute interest in a number of ways and may also apply other charges (like balance transfer fee, early payment or foreclosure charges, etc.) making Credit Card maintenance expensive.

Apply now for the Credit Card that is best suited for you!

Please visit www.mymoneymantra.com, a leading lending marketplace with over 25 years experience of providing financial services.

Speak to our Credit Card Specialists toll-free at 18001034004 for more information today!