Best Credit Cards For Beginners: Key Factors To Check Before Applying

Getting your first credit card can be a daunting experience with a wide range of options available in the market. Varying fee structures, high interest rates and a maze of rewards programmes may lead to confusion in selecting the right credit card for first-time users.  

However, choosing the right credit card is an important step in establishing healthy financial habits and building a strong credit history. If you're just starting out, here's a guide to help you understand what to look for and a few beginner-friendly cards to explore.

• Spending patterns: Before choosing a card, evaluate where most of your spending happens — online shopping, dining, fuel or bill payments. Some cards offer higher rewards in specific categories. Choosing one that fits your spending habits can help you maximise the benefits of using a credit card.

• Fees and interest rates: Beginners should avoid cards with high annual or joining fees. Several cards offer good benefits without charging high fees. Also, check the interest rate. High interest rates can quickly increase your debt if the balance isn't paid in full. If you are a beginner, it's advisable to choose a card with no annual or joining fee as well as an affordable interest rate.

• Understand eligibility: Many credit cards have eligibility conditions linked to income and credit history. Beginners often don't have a credit score. So, it's important to look for cards meant for first-time users or students.

• Credit profile: An important purpose of a first credit card is to build a strong credit history. Choose a card that reports your repayment history to major credit bureaus. Paying bills on time and keeping the utilisation ratio low will help increase your credit score over time.

• Avoid multiple applications: Every credit card application affects your credit score. Applying for several cards at once can hurt your credit score. It's better to research and apply for one card at a time.

• Read the terms carefully: Always check the fine print. Offers like sign-up bonuses or zero-per-cent interest for the first few months may look attractive but can come with conditions or even hidden fees. Know the interest rate, charges and terms before applying.

Here are a few credit cards you may evaluate as a beginner. Picking the right card should depend on your credit card use and financial needs.

• SBI SimplyClick Credit Card: The annual fee of Rs 499 is waived off on spending Rs 1 lakh annually. It offers 10X rewards on selected online partners and 5X on other online spends. The card also comes with an Amazon gift card on joining and a fuel surcharge waiver.

• Axis Ace Credit Card: 5% cashback on bill payments through Google Pay and 4% cashback on select apps like Swiggy and Zomato. It includes free domestic lounge access and a 1% fuel surcharge waiver. Good for users who pay bills regularly.

• HSBC Visa Platinum Card: No annual or joining fee. The card helps to earn two reward points per Rs 150 spent. It includes fuel surcharge waivers and allows conversion of points into airline miles.

• Standard Chartered Super Value Titanium Credit Card: The credit card provides 5% cashback on fuel, phone and utility bill payments (with monthly limits). It also offers one reward point for every Rs 150 spent on other services and products. It could be suitable for regular utility users.

For beginners, the goal should be to start simple. Choose a card with manageable terms, low fees and benefits that match your spending. Responsible usage will help build a credit score and make it easier to access better financial products in the future.