Sunday, November 18, 2018

5 Facts About Credit Cards Every Young Adult Should Know



Young adults falling between the ages of 21 and 25 are now entering the workforce. Many of them are turning entrepreneurs and taking more financial risks as the demand for credit cards grow year after year. However, young adults often lack financial wisdom and guidance.

One great piece of financial advice is to be cautious before availing a credit card. There are a lot of terms and conditions that one needs to fulfill and most youngsters are clueless about these. All new cardholders need to keep the following points in mind to reap maximum benefits out of their credit cards.


5 credit card features to remember:


Availing credit cards is very easy. Remembering the minute features and tips is a bit difficult but not impossible. Here are a few of those to consider:

  • Options of credit cards are plenty: There are several types of credit cards for user-specific purposes. Two common types are general purpose cards which are usable anywhere and private label cards that are usable at select stores and service stations. Again, some cards offer attractive reward points when transacted for specific purposes. There are also secured and unsecured credit cards. To avail an unsecured card, you need a good credit history. 
  • Apply for only 1 card initially: These cards are often tricky. Since you are a novice in this area, you may not know how to use a credit card wisely. Do not make heavy purchases initially and always settle your bills on time. This will teach you financial discipline besides enhancing your creditworthiness.


A great first card can be the Bajaj Finserv RBL Bank SuperCard. It combines the features of 4 cards into 1. Use it to withdraw cash from ATMs without incurring any interest for up to 50 days. Pay only a flat 2.5% processing fee.

  • Compare cards before availing one: You must gather detailed information about the financial products from official websites of different lenders. Compare their features and benefits before you finally apply for a credit card. This will help you get the best card suiting your requirements. 
  • Build an emergency fund: Emergencies strike without warning and can hamper your EMI payments. Medical emergencies, sudden home repairs, car repairs and a host of other issues corrode your credit. Hence, save as much as you can so that you don’t always have to rely on your card.
  • Maintain healthy credit habits: Many young adults have bad credit habits due to poor financial knowledge. These habits include never checking credit scores, defaulting on repayments, using too many cards simultaneously, utilising more than 30% of the card limit, and maintaining no independent savings. These habits can weaken your credit history, and hence, lower your CIBIL score.

Tips for credit card beginners


There are a few terminologies that you should remember.

  • Credit line/credit limit: It is the maximum amount on the card which a user can utilise. 
  • Grace Period: The grace period denotes the interest-free time period within which one has to pay off the dues. Interests start to accrue post this period. 

Make sure to clear all your doubts before availing a credit card. It will help you to better utilise the card and enjoy its various benefits fully.


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