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What to Know Before You Decide to Apply for a Credit Card?

Using a credit card can be a great financial decision for you. If you know how to use it in the best way possible, then this article will be helpful for you. A credit card enables you to borrow money from the bank under specific conditions. Your monthly income is considered the most important factor among all the criteria.

Not to mention, there are other vital factors that you also need to consider in this regard. You can perfectly manage your day-to-day expenditure using a credit card. But here are some important aspects you need to know before applying for a credit card.

Secured and Unsecured Credit Cards

Unsecured and secured, two kinds of credit cards are available. Following your eligibility criteria and financial requirements, you can opt for a secured or unsecured credit card. If you want a secured credit card, you must put something as collateral to the bank. But an unsecured credit card does not require you to put anything as collateral.

Interest-Free Period

If you use a credit card, you should know that there is an interest-free period during which you are not required to pay any interest. The period is from the transaction date to the payment due date. If you make the full payment to the bank for the amount you used with a credit card within an interest-free period, then you are not supposed to pay any fine or interest in the process.

But if you make the payment beyond the due date, you must pay a fine or interest. The applicable interest rate is different for a different bank or credit card. This is why paying credit card bills within the due date is considered a good habit.

Interest Rates

The bank offers you credit cards to use because the bank earns money through the interest you pay against late payments. Different credit card companies or banks charge you with different interest rates that you should know before you apply for a credit card.

The daily compounding interest rate rule is followed in most credit cards. Your part would not be intelligent if you applied for a credit card without enquiring about its interest rates.

Minimum Payment

Depending on the credit card transaction, you should clear a specific minimum payment as part of your credit card agreement. Not to mention, you are also allowed to make a complete credit card payment if you want. You can take loan easily.

This minimum payment is calculated per a specific percentage of your current credit card balance. Hence, you must know about this aspect before you decide to apply for a credit card.


You will have to pay fees and charges as part of the credit card agreement. You should also know about such aspects before applying for a credit card. This is how you would be able to find the best credit card.


After considering the above aspects, you are supposed to apply for a credit card of your choice. This is how you would be benefitted to the fullest. Not to mention, you can also do more research as per your preference.