A credit card can be used as a backup to help you make transactions and in emergency situations, but it can also be used for much more. A credit card will aid in the creation of your credit history, which will aid you in your financial endeavors. If you are new to using a credit card, it is particularly important to consider the following factors before selecting your first credit card.
Do your own Research
When you’re about to get your first credit card, it’s natural to be more optimistic about your credit balance, where you can do more stuff. However, be aware of the ramifications of obtaining a credit card. If you use it incorrectly, it will haunt you for the rest of your life. So make sure you do your homework on the credit card and plan how you’ll use it. It would help you in the long run if you are familiar with the process of applying for and using credit cards. It’s not your plate of rice, so don’t skimp on testing.
Ensure You Have Steady Income above AED 5000
Banks and financial institutions will ask you for proof of income once you apply for your first credit card. After all, being accepted for a credit card depends on your ability to repay your debt. As a result, banks would want to know that you are capable of repaying the loan and that they can put their faith in you. According to the UAE’s central bank, credit cards would be accepted without a cosigner if you are under the age of 21 and have proof of income. As a result, it’s a smart idea to work part-time so you don’t have to rely on anyone to cosign your loan.
There are several different types of credit cards available, so it’s important to weigh your choices before choosing your first credit card. Choose your card based on your concerns and requirements. For example, if you are concerned about making timely bill payments, you can opt for a card with a low annual percentage rate. A protected credit card might be a great choice if you’re worried about losing power while using a credit card. Many lenders can entice you with various deals, but it is up to you to decide if it is the right choice for you.
Read the Fine Print
Because of its scale, many people would not read the terms and conditions. Ignoring the fine print is a major mistake that could put you in danger in the future. So, before you pick a credit card, read the terms to make sure you understand the fees, incentives, and interest rates. If you see something unusual, contact your banker right away.
Avoid Cards That Require High Credit Scores
Before you apply for a credit card, you should be aware that the acceptance of your credit card is entirely dependent on your credit score. Your credit score is a number between 300 and 900. If you are denied credit, it will not affect your credit score; however, lenders looking at your credit history will affect your score. You do not have a good credit background because this is your first credit card. As a result, it is preferable to select lenders who support a standard credit score. Alternatively, you can review your credit score with the AI Etihad credit bureau to see where you stand in terms of creditworthiness and apply for a credit card accordingly.
Use Loans to Your Advantage
A personal loan will be recorded as credit in your credit history, and a good loan history will indicate to credit card companies that you are a lower risk and have the ability to repay the loan on time. Positive loan details, such as timely loan repayment, will stay on your credit history for ten years. A closed account, on the other hand, will not help you improve your credit score, but it will look good on your credit report to banks.
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