Getting your first credit card? Here's what you should know

Credit cards are a convenient way to make purchases and earn rewards. Like many first steps, getting the first credit card is the first step to bigger rewards.

Experts say that the best cards aren't usually for beginners.

In the words of Adhil Shetty, CEO, BankBazaar, "Cards that come with big rewards and perks including significant sigh-up bonuses, are available only to applicants with good or excellent credit score and longer credit histories who meet certain income requirements."

This means beginners should always start small.

While applying for the first credit card, Anil Pinapala, Founder and CEO of Vivifi India says, applicants should not apply to every bank that advertises its cards as card inquiry data is reflected in CIBIL and can adversely affect other borrowing needs. They should, instead stick to banks with either good history of transactions or with salary accounts for better approval rates.

Additionally, first-time users should watch their debt-to-limit ratio, as Suman Gandham, Founder of Finin suggests.

"Applicants should question themselves if they actually want to be indebted to someone and if they can repay the full amount on time," Gandham opines.

Most credit cards have an annual fee. While some cards are lifetime free, for others, the fee is waived off for the year of joining or the year following it.

At other times, the fee is waived off if the borrower meets certain spending milestones.

Typically, the rewards they earn via regular spending should exceed the fee of the card.

APR stands for annual percentage rate or the interest rate borrowers pay on balances they carry from month to month.

Individuals should look for the lowest APR rate available and remember to revolve as little balance as possible.

Credit cards come with some hefty charges for withdrawing cash. Apart from the high-interest rates, there could also be penalties for late payment of credit card bills, exceeding credit limit, or making payments in a foreign currency. It is essential borrowers understand what these charges are so that they transact smartly.

The credit limit is the maximum amount borrowers can spend per month using their card. As a thumb rule, users should not spend more than 30-40 percent of their credit limit. For beginners, the credit limit might be a small amount, and therefore, their utilization may be even smaller.

One way to have a bigger credit limit in the first card is by opting for a credit card against security like a bank fixed deposit.

Credit cards come with a variety of rewards. This means users must match their lifestyle before getting the first card.

For example, if the primary credit card spends are travel and dining, entertainment benefits such as free movie tickets may not be the right fit.