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3 Questions To Ask Yourself Before Applying For A Credit Card

Adhil Shetty

With a credit card, you can access instant purchasing power and build your credit score and. However, it is important to determine whether adding a credit card and its bills to your list of financial responsibilities is ideal at your specific point in your life, especially when you signing up for your first one. While issuers have eligibility criteria that outline age and other requirements, take a look at the three vital questions you must ask yourself to make a sensible decision.

Are You Financially Capable Of Repayment?

Credit cards make life extremely convenient as they help you buy goods or services immediately and pay later. However, you shouldn’t forget that judicious use of a credit card demands timely repayment as untimely repayment can prove to be costly. So, when you plan to avail a credit card, especially for the first time, keep in mind that you’ll need to repay the amount you have spent during each billing cycle. More importantly, remember that you need to pay each bill in full to avoid amassing interest charges. This also means you need to have a regular source of income that will help you make these payments religiously. Remember, your income must be much higher and not equal to what you owe on your credit card bill at the end of the month for comfortable repayment.

What Are Your Monetary Obligations?

As a responsible adult, you are sure to have financial obligations to tend to each month including rent payments, utility bills, and maybe even investment or insurance payments. So, give enough thought to ensure that your credit card payments do not hamper these outflows. This way you’re sure that you aren’t getting yourself in a debt trap with interest building up on your credit card dues.


Can You Pay The Additional Charges On A Credit Card?

While you may find a credit card that charges you a nominal interest or offers many rewards and perks, pay attention to all the extra charges you’ll need to shell out. This include the annual maintenance fee, late fees, ATM withdrawal charges, charges on petrol purchase, and charges on lost cards. Though you may think some of these don’t apply to you, it is best that you take them into consideration so you’re not surprised later.

While good credit management can be a boon, mismanagement can lead to a cycle of debt that you’ll find it hard to get out of out. So, if your answer to the above questions are ‘yes’, you are now ready to get your first credit card! However, if you have answered ‘no’ to these questions, it would be better to work on these aspects before applying for a credit card.

The writer is CEO, BankBazaar. is a leading online marketplace in India that helps consumers compare and apply for credit card, personal loan, home loan, car loan, and insurance.