A credit card is a versatile credit instrument that can benefit you in a variety of ways. Imagine a card as a fully loaded wallet that you carry around with you at all times. Every time you withdraw money from it and repay it within the time limit, your credit limit is restored, and you are rewarded for your responsible spending.
A credit card is a useful tool for establishing and improving your credit history. The more you use your card on a regular basis and pay your bills on time, the more credible and creditworthy you become. It helps you gain trust in your lenders by allowing them to rapidly grant you credit or loans. However, this is only achievable if you use your credit card app with extreme caution.
What role does a credit card play in credit building?
Having a solid credit history and a good track record can help you get the greatest interest rates on loans and mortgages. Here's how to improve your credit score –
Being an authorised card user –
This is the most common way of establishing a good credit score. Applying for and using a credit card in your own name helps you establish credit. To prevent late fees or an increased rate of interest as a penalty, you must also pay your payments on time, within the grace period.
Starting with a secured is a good place to start –
A secured card is one that requires you to put up a specified amount of money as collateral for the card you want. This is often reserved for first-time applicants with no credit history or credibility. This works similarly to a mortgage; in that you must have a particular amount of collateral in order to get funds. As a result, if you're having trouble getting a credit card, a secured card is a good option.
Store Cards –
If you're having problems getting a conventional credit card, a store credit card is a good option. A store card is typically offered by a retailer to assist you in shopping at their establishment. These cards are often easier to obtain than other credit cards for persons who have no credit history. These cards normally feature a higher interest rate than regular credit cards. This will almost probably not be an issue if you pay all of your dues on time each billing cycle.
Important to note –
It is possible that you will have opportunities to obtain a card quickly, even if you already have one. It's crucial to remember that having too many credit cards, more than you need, can drastically harm your credit history rather than help it. It's also important to maintain track of your credit utilisation ratio, which is the percentage of your credit limit that's accessible for immediate use.
1) How does one go about getting a credit card?
You can quickly apply for a card utilising a credit card app if you need one.
2) Can you recommend a good credit card app?
If you're looking for a solid card app, the Bajaj Finserv app is a fantastic choice.
3) Is it possible to use a credit card for bill payments?
Yes. You can use your credit card to pay bills, recharge your phone, and so on.
4) Is it true that paying bills with a card improves your credit score?
It does, in a roundabout way. If you pay your payments on time, you will have a clean credit history, which will improve your credit worthiness.
