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First Time Credit Cards

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To commence this article firstly it has to known as to what is a credit? Credit is something which enables an individual or a company to purchase today and pay for the same tomorrow. This is the arrangement when there is no cash in hand. The seller gives the article only on the assurance that the buyer is able to pay tomorrow. It is nothing but trustworthiness. Credit card is the card used to pay the said money of the transaction. Credit card is the instrument which is used to pay the bills or the loans rose for the purchases. It is not a replacement for cash but it is a loan which has to be repaid.

Only there are some companies or institutions which issue credit cards to the beginners. To ascertain that the buyer would repay the seller verifies the account details and the statement therein, employment and salary details, a person who could repay having a credible credit history, in case of default from the beginner etc. The person desiring for the credit card should apply with the institution. The institution after verifying the management of the account would approve for the credit to be given. The best interest rates should be chosen when the credit is sanctioned. Next is, that the terms and conditions of the credit would be explained to the individual. It is accompanied by the issuance of the credit card also for enabling the person to operate the credit.

The credit cards are not to purchase food, clothing etc. Instead it is used to make major purchases or the purchases which is not affordable by cash. It is the normal tendency of a person to utilise the credit card in place of cash for purchase of petty items. To make such purchases only cash or debit cards should be used.  Otherwise, this leads only to accumulation of debts. By using a credit card only minimum payments should be made. As far as possible the debts should be avoided. A person should make purchases wisely, that is purchase of unwanted articles should be avoided.

The purchases should be made within the stipulated credit limit. By this the credit score and the credit history is maintained. If the balances are less then it is easy to manage.  To maintain a low balance a person should carefully, cautiously and judiciously spend on the purchases. This way the debt is not formed at anytime. The debt only leads to stress and mental tension. The money which is not available should not be spent. Lavish living style should be curbed. Unnecessary loans should not be obtained. When a person is having cash, it has to be spent. The credit cards should not be used. In turn, he is giving room for the debt to be formed. Sometimes people have a tendency of borrowing too many loans, which is another way of accumulation of debts. To clear one debt, another loan is taken. This is how the chain of loans is formed.

The chance of the credit history does not improve at all. It lowers day by day.  The beginners get tempted very fast by the credit cards. So, they should avoid too many credit cards. They should have only one credit card. Building up of good rapport with the institution enables faster and quicker approval of the credit cards and the credit facility. Sometimes the department stores in some countries also issues credit cards which are easily available. The interest rates are very high in these credit cards. But it is not as safe as the one issued by the financial institutions. First time users can also get a secured credit card in which only after some deposit is made with the institution the card is issued. The credit limit given is same as that of the deposit. In case of default the institution appropriates the deposit towards the dues. Having a first credit card means a first step in the financial world. Credit inquiries are also made by the institutions to judge the credibility of the borrower. So, to avoid any bad remark one should maintain the promptness in paying the debts every month. While going for the credit cards the points to be considered are the market should be surveyed properly and the best card should be opted. The interest rates should be reasonable. The payment status should b reported to the credit bureaus. The credit card with the favourable terms and conditions only has to be selected.

The credit cards which do not charge annual fees and other charges, credit cards which offer gifts for purchases should be chosen. Articles where rebates are given should only be purchased. One should not get carried away with the trendy and fancy things as also the packaging. One should buy only things that are cost effective. Shopping at stores which are reliable and reputed is advisable. Before buying an article one should consider the necessity of it. Whether it is really required or not? How it is going to help them? How it is useful to them? Etc. simply seeing an article and purchasing it instantaneously would only increase the burden of repayment. Poor quality articles should be easily identified. It could be safely concluded by considering the above aspects that a first time credit card user should be very responsible in using the credit card, so that the person’s reputation is maintained.