Should You Get A Credit Card When You Start A Job?

By Saroni Chakravarti | November 4, 2020

If you’re fresh out of college and have just joined the workforce, the prospect of getting a Credit Card may seem attractive. Here are reasons why you should get one. 

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There are some obvious perks of having a Credit Card: cashbacks, rewards, air miles, rewards on spends etc. But did you know that perhaps one of the biggest benefits of having a Credit Card is that it secures your financial future? No? Read more about it here.

A Credit Card Builds Your Credit Reputation

How responsibly you’re using your Credit Card will have a bearing on your ability to be approved for crucial loans in the future like Car Loan, Home Loan etc. So what are those things that you will need to keep in mind in order to ensure that your credit reputation is spotless? For starters, how long you’ve been using your Credit Card, how much you’ve charged to your card and how prompt you are in repaying your dues are some of the factors credit bureaus consider when they determine your Credit Score. Banks rely on this score to determine your creditworthiness for a loan or Credit Card in the future. This also gives them a good idea about how likely you are to make good on the funds they lend you as loan.

Thus, having a good credit reputation doesn’t just improve your chances of being approved for a loan, it also reflects your personal financial habits.

Additional Reading: How The Interest-Free Period Is Calculated On Your Credit Card

Credit Cards Help You Earn Rewards

If savings is one of your foremost goals, then a Credit Card can help you early on in your financial journey. You can earn a plethora of rewards with a Credit Card – air miles, cashback, and reward points when you charge expenses to your card. You can use these accumulated reward points and air miles to get discounts on big-ticket purchases or even flight tickets.

Additional Reading: How To Make Your Own Credit Score Calendar

Credit Cards Help You Make Big Purchases

Once you start earning money, it’s only natural that you would want to indulge your long-held aspirations – treating your parents to dinner at a fine-dining restaurant, a foreign holiday or an expensive gadget that you’ve wanted to own for a long time. This is where a Credit Card can come to your rescue.

Whenever you charge a big expense to your card, remember to make your repayments before the due date. Some cards may also give you the option to split such payments into smaller ones. Read the clauses carefully beforehand. The financial flexibility that a Credit Card offers is quite unmatched – one of the several reasons why you should consider getting one.

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Use Your Credit Card Responsibly

While a Credit Card allows you to make big spends without using the cash in your bank account immediately, it comes with great responsibility. Missing payments on your card can land you in a debt trap that can take decades for you to come out of. Interest rates on Credit Cards go as high as 25% – 30%.

Having too many Credit Cards even if you seldom use them is not a good idea. Lenders and financial institutions can dub you credit hungry and take this into consideration while approving or rejecting your credit application.

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Your Credit Score indicates your ability to repay your debts as well as your creditworthiness in being approved for future loans. It shows all records of your credit payment history compiled from all retail banks, financial institutions and Credit Card issuers. You can check your Experian Credit Score and detailed credit report here.

Landed a new job and raring to get a Credit Card for yourself? Check out contactless options from popular banks by clicking the button below.

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Category: Credit Cards Credit score Money Management
Saroni Chakravarti

About Saroni Chakravarti

Saroni loves all things quaint and old world- be it art, music or cinema. She has a special knack for spotting the weirdest traits in people and can't for the life of her understand why she attracts the worst co-passengers. Despite her cynical exterior, she still hopes for a world that will be free from discrimination and cruelty. When she's not spending her day commuting, she can be found watching funny videos, reading, and sending out needy vibes to strays around her.

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