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Factors to Consider Before Getting Your First Credit Card

Contributed by Credit Bureau (Singapore)

Every credit card has an appealing set of benefits to convince you to apply for it — but before you sign up, find out what’s important to you in a credit card. It may seem easy to get by with cash but having a credit card is a necessary part of building your credit history and maintaining your financial health. 

So before sending in your application, take some time to consider what you need out of this card — knowing that will make it a lot easier to pick the right one. Here’s 3 factors to consider before getting your first credit card.


1. Know What You Are Signing Up For 

Do not apply for a credit card without understanding the fine print. It can be frustrating trying to comprehend credit card terms but it is always better to know the details upfront than to incur surprise fees and charges or if you qualify. Before you sign that application, make sure that you know exactly what you’re getting into. Here’s an example.

Repayment Grace Period

20-25 days from statement period end date

Minimum Payment

3% of the total due or $50, whichever is higher

Interest Rate

24% per annum 

Late Fee


Credit Limit

4 X monthly income 

Annual Fee

$30 - $500


21 years and above

Annual Income

$30,000 and above for Singaporeans

$45,000 and above for foreigners


2. Your Spending Habits

Before you start choosing a card, ask yourself these questions. Can I pay for the purchase in full every month? Or do I intend to pay the minimum sum required and carry the balance from month to month? If I do rollover, can I pay the extra charges incurred? Is this card meant for emergencies only? 

The truth is, responsible credit card activity is a good thing as it will be reflected positively on your credit report. Using your credit card responsibly and paying in full every month will help you to build a strong credit history which could put you in good stead when applying for a car loan or home mortgage. Having a credit card in your wallet does not mysteriously incur debt, but it can help you improve your credit score.


3. Credit Card Benefits

When it comes to selecting the right credit card for usage, there is no one size that fits all. Everyone has different needs and wants. You need to identify the primary purpose of the card, and find one that best suits your own personal needs. For example, if you are looking for a cashback card for everyday purchases like groceries or petrol, check if the credit card has special perks for those places you frequent. Or if the card is widely accepted for overseas travel? It pays to do a little background reading.

While credit cards have all the above benefits – besides the obvious ones such as earning you cashback and airline miles – it’s important to be a responsible user.