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Getting Your First Credit Card? 5 Things You Should Do

Outlook Money

|

May 2025

Credit cards provide easy access to credit. But if you are not careful, it could entrap you into a debt spiral, leading to low credit score and further borrowings to settle off your old debts

- Manas Malhotra

Getting Your First Credit Card? 5 Things You Should Do

Those of you in your early 20s (Gen Z), may be thinking of getting your first credit card, as it allows you freedom to spend the way you want to. However, it's also a major step in handling your own finances.

Credit cards offer easy access to credit, and is also a convenient way of establishing a credit history. Cashless transactions, reward points, no-cost equated monthly instalments (EMIs), and discounts on shopping and dining are some of the benefits these cards offer.

Yash Verma, a 22-year-old salaried professional, has been using his credit card for a year and views it as an essential tool for managing his finances. He uses it for paying his bills, and for shopping and expenses at petrol stations, particularly when his bank balance is low. Says Yash, "Using a credit card is an advantage, as it offers solution and flexibility when I feel financially stretched." He seems to manage his debt in a way that the rewards and other benefits outweigh the risk of debt.

But along with the flexibility and convenience comes the risk of falling into a debt trap or overspending. Says Gaurav Goel, founder, Lamoksh Investments and a Securities and Exchange Board of India-registered investment advisor (Sebi-RIA), “Easy access to credit can lead to overspending, and credit card loans carry a high rate of interest of 30-40 per cent annually. Hidden fees, late payment penalties, and high credit utilisation can impact your credit score, making future loans harder to secure. Also, the lure of rewards, fraud risks, and minimum payment trap can lead to financial strain.”

FLERE HISTORIER FRA Outlook Money

Outlook Money

Outlook Money

Gold vs Real Estate: What You Should Know

Both gold and real estate have long been preferred investment choices for Indians. They hold sentimental value, too. We compare the two and assess if one or both assets can complete your portfolio

time to read

7 mins

October 2025

Outlook Money

Outlook Money

Strategic Vs Tactical Allocation

Fixed-income investments can be bucketed based on your time horizon. However, you can also tweak the allocation, tactically, in accordance with the market conditions

time to read

4 mins

October 2025

Outlook Money

Outlook Money

Discipline Is Key, Shows This Retiree's Life

Pramod Agrawal, 64, a former banker, is an inspiration for active retirees who do not know what to do with their idle time post retirement. Pramod, who lives with his spouse in Ghaziabad, had the option of staying at home, like most retirees, but chose to use his expertise in new ways. Now, he is a visiting faculty at several institutes.

time to read

4 mins

October 2025

Outlook Money

Outlook Money

Will The E20 Fuel Rollout Make The GST Benefit Ride Bumpy?

The GST rate cut will benefit most car and two-wheeler buyers, but the E20 fuel rule may upset your budget. Calculate well and plan ahead for a smooth ride

time to read

6 mins

October 2025

Outlook Money

Outlook Money

Input Tax Credit In Insurance

Health insurance premiums in India have become more affordable after the government removed the 18 per cent goods and services tax (GST) on them.

time to read

2 mins

October 2025

Outlook Money

Regulatory Roundup

A few regulatory changes in September 2025, and how they will impact you

time to read

4 mins

October 2025

Outlook Money

Frugality: A Smart Money Move

We often equate frugality with penny-pinching behaviour. But it isn't. It is about being smart with money, and spending it on things that give value and satisfaction

time to read

5 mins

October 2025

Outlook Money

Here's How To Make Health Insurance Claims

For many people, health insurance is the safety net that prevents a medical emergency from turning into a financial burden. Yet, policyholders often find themselves confused while filing claims.

time to read

1 mins

October 2025

Outlook Money

Outlook Money

Why Seniors Need To Know Their Legal Rights

Many senior citizens often end up in destitution after being abandoned by their kith and kin, typically after transferring their property. Can taking recourse to laws meant for seniors lend a helping hand?

time to read

5 mins

October 2025

Outlook Money

Advantage Of Low Cost, High Returns

If you want to stay away from the constant game of chasing outperformance or worrying about underperformance, exchange-traded funds (ETFs) can be a smart option. They provide broad market exposure, are cost-efficient, and eliminate the need to time the market. An index ETF allows you to invest in sectors and stocks of the underlying benchmark in the same proportion as the benchmark. If you want to invest in Nifty 50 companies, Nippon India Nifty 50 BeES could be a decent choice.

time to read

1 mins

October 2025

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