Best Credit Cards for Beginners: Secured, Unsecured & Co-Branded Cards

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If you do not have a credit history, a secured credit card can be a useful starting option. You need to open a Fixed Deposit with the bank, which acts as security for the card. Since the FD acts as security for the card, secured credit cards are usually easier to get. You may not need regular income proof or an existing credit history. However, approval is not guaranteed. The card issuer will still check your KYC details, age, and other eligibility requirements before approving the card.

Here is the process to apply for an FD-backed credit card:

• Open the official website or mobile app of the bank offering the secured card, such as IDFC FIRST Bank or Kotak Mahindra Bank.
• Select the secured credit card option, such as IDFC FIRST WOW! or Kotak 811 Dream Different, if available.
• Enter your PAN and Aadhaar details for digital KYC.
• Open a Fixed Deposit for the minimum amount required by the bank.
• Check the credit limit offered against your FD amount. The limit is usually around 80% to 100% of your FD value, but the exact limit can vary depending on the bank and credit card.
• Add your nominee details and complete OTP verification.
• Complete Video KYC if the bank asks you to do so.
• Once your application is approved, the time taken to receive the physical card or get an instant digital card depends on the card issuer and its technology.
• Your FD continues to earn interest while it remains with the bank as security for your credit card.

Hence, an FD-backed credit card can be a simple way to start building your credit history when you do not have an existing credit score.

How to Apply for an Entry-Level Unsecured Credit Card via Mobile Banking?

If you are doing a job and have regular income, getting a credit card is easier. You can apply for an entry-level unsecured credit card through the bank's official mobile app. 

You should download the official banking application of your salary or savings account bank from the Google Play Store or Apple App Store.

Here are the steps to apply for an entry-level unsecured card via mobile app:

• Download and open your bank's official mobile banking app on your phone.
• Complete the registration process and log in using your MPIN, password, or biometrics.
• Then go to the “Cards” or “Apply for Credit Card” section.
• Check if pre-approved credit card offers are available or not. 
• Then select an entry-level or lifetime-free card that suits your needs and eligibility.
• Now you have to enter your employment details, company name, and monthly income.
• Then upload the required identity and address documents and, if requested, your latest salary slips or bank statements.
• Carefully check the credit limit, annual fee, interest rate, and other charges mentioned in the card's terms and KFS/MITC.
• Then enter the OTP. 
• Now complete the digital verification or e-sign process.
• Track the application process.

Hence, a person with a regular income can apply for an entry-level unsecured credit card through their bank's digital platform, subject to the bank's eligibility rules.

How to Apply for a Beginner Co-Branded Card via Website Portals?

A co-branded credit card is offered by a bank in partnership with another company or platform. These cards can be useful for beginners who regularly spend on a particular platform or category and want to earn rewards or cashback.

You can visit the official website of the bank or its co-branded partner to check whether you are eligible.

Here are the steps to apply for a beginner co-branded card by visiting the website:

• Visit the official website of the bank or co-branded partner, such as the Amazon Pay ICICI Credit Card page.
• Go to the Credit Cards section and select the card you want.
• Click on the “Apply Now” button.

What are the Important Rules and Guidelines for Beginner Credit Cards?

The Reserve Bank of India (RBI) introduced various rules for credit card issuers. This is for improving transparency and protecting cardholders. Beginners should understand these rules before using a credit card.

Here are the major regulatory rules and guidelines:

• You will get Most Important Terms and Conditions (MITC) document. 
• If you do not activate your credit card within 30 days of issuance, the bank must ask for your consent through an OTP. 
• If you do not give your consent within 7 working days, the bank must close the card without charging you any fee and update the credit bureaus about the closure.
• Card issuers must give you at least one option to change your billing cycle and payment due date. You can choose a date that matches your salary date or monthly cash flow, making it easier to manage your credit card payments.
• Paying only the Minimum Amount Due (MAD) can help you avoid late payment fees for that billing cycle. However, you still need to pay the remaining balance, which may attract high interest charges. You may also lose the interest-free period on new purchases. Under RBI rules, the MAD should cover applicable taxes, interest, fees, and a part of the principal amount so that your outstanding balance does not keep increasing due to unpaid charges.

Conclusion

Getting an unsecured credit card usually requires proof of income and employment. However, not having a regular income does not always stop you from getting a beginner credit card. If you do not have formal income proof, you can consider an FD-backed secured credit card or an add-on card linked to a family member’s primary credit card.

You should always pay an outstanding amount before the due date and keep your credit utilisation low. Responsible use can help you build a stronger credit history and improve your chances of getting better loans and credit cards in the future.

FAQs:

What is minimum age to apply for a credit card in India?

The minimum age is generally 18 years, but the exact age requirement can vary between banks and card products.

What is a secured credit card?

A secured credit card is issued against a Fixed Deposit held with the bank. The FD acts as security for the card. These cards can be useful for people who have little or no previous credit history.

Does applying for multiple credit cards hurt a beginner's credit score?

When you apply for multiple credit cards, lenders do a hard inquiry. It can affect your credit score badly. If you apply for too many applications in a short time, it can make your image look more credit-seeking to lenders. 

Is the “Under 30% Credit Utilisation” Rule Mandatory or a Guideline?

Keeping your credit utilisation below 30% is a general guideline, not an RBI-mandated limit. You can legally use up to your full credit limit. However, using a lower portion of your available limit is generally considered better for your credit profile. Regularly using a very high percentage of your credit limit may negatively affect your credit score.

Can a college student get a credit card without a job?

Yes, depending on the bank's rules. A student may be able to get a secured credit card against an FD or an add-on card linked to a parent's primary credit card.

What happens if I pay only the Minimum Amount Due every month?

Paying only the minimum amount can help you avoid a late payment status for that bill, but the remaining balance can attract high interest charges. You may also lose the interest-free period on new transactions until the outstanding balance is cleared.

What is MITC in credit cards?

MITC means the most important terms and conditions. It is a document that provides you with information about the credit card. It includes all the fees and interest rates. 

How Long Does It Take to Generate a First-Time Credit Score?

It is not fixed. Credit bureaus like CIBIL, Experian, CRIF, and Equifax need enough information about your credit activity and repayment history before they can calculate a score. Your bank or card issuer usually reports your account details regularly. Until the bureau gets enough information, your credit report may show “NH” (No History) or “NA” instead of a credit score.

Do secured credit cards report payment history to credit bureaus?

Yes. Banks generally report payment activity on secured credit cards to credit information companies the same way they do for other credit cards. This means responsible use of a secured card can help you build a credit history.

Can an FD-Backed Credit Card Be Converted Into a Regular Credit Card Later?

There is no guarantee that an FD-backed credit card can be converted into a regular credit card. Some banks may offer an upgrade if you have a good repayment history. However, the bank will decide whether you qualify. In some cases, you may need to close the secured card, release the FD, and apply for a new regular credit card.