A credit card can be used as a backup which helps you to make purchases and at time of emergencies but it can be much more. A credit card will help in building your credit history which helps you further in financial life.
If you are fresher to use a credit card, then it is more important to consider the below things before you choose for a first credit card.
Do your own Research
It is quite common when you are ready to get your first credit card you will be more excited about your credit balance where you can make more things to happen. But beware of what getting a credit card entails. If you use it wrongly that will haunt you for your lifetime. So make sure to research about the credit card and plan to use it accordingly. Being well-versed in the process of applying for and using credit cards will benefit you in the long run. Don’t skip to research as it not your plate of rice. Utilize MoneyMall Credit Guides
Ensure You Have Steady Income above AED 5000
Whenever you apply for your first credit card, banks or financial institutes will ask you for proof of your income. After all, being able to repay your balance is the key to getting approved for a credit card. So banks will need to know that you can repay the amount and that they can trust you. As per the central bank in UAE, If you are age is under 21 but you have an income proof your credit card will be approved without any cosigner. So it is good to do a part-time job so that you don’t need to ask anyone to cosign.
There are plenty of types of credit cards out in the market, so it is important to consider your options when deciding on your first credit card. Depending on your concerns and needs choose your card.For instance, if you are worried to make the bill payments on time, then it is best to choose the card with a low annual percentage rate. If you are afraid that you don’t have control over using a credit card, then a secured credit card could be a great option. Many lenders will tempt you with certain offers and all but it is you to consider if it is the best option for you.
Many people will not read the terms and condition because of its huge size. This is a big blunder if you ignore the fine print that may risk you in future. So while you choose a credit card it is important to read the terms and checked the fees, rewards and interest rates. If you find something fishy immediately ask your banker.
Avoid Cards That Require High Credit Scores
Before applying for a credit card you need to know that your credit card approval completely depends up your credit score. Your credit score ranges from 300 to 900. If you’re rejected for a credit that will not affect your credit score, but your score is still affected by lenders looking into your credit history. Since it is your first credit card you may not have a great credit history. So it’s better to choose those lenders who accept for a normal credit score. Or else check your credit score on AI Etihad credit bureau to know where your creditworthiness stands and apply for a credit card accordingly.
If you acquire a personal loan this will be count as credit in your credit history where a positive loan history will show the credit card banks that you are less risk and capacity to repay the amount on time. Positive information of loan like if you pay off your loan on time will remain on your credit history for 10 years. However a closed credit will not help in increasing your credit score, but it looks good for banks in your report.
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