Credit Cards

Have you started a new job? Has your first salary been credited? You must have started getting bombarded with calls from your bank and credit card companies to get a credit card. As a new earner, you will also be tempted to get a credit card as soon as you get your first salary. 

But is now the time to get a credit card? What role can a credit card play in your personal finances? What are the advantages and disadvantages of obtaining a credit card? We will seek to respond to your concerns.

Credit cards are a great tool to improve the personal finances of new earners. When you are new to a job earning a regular income, or starting a new business which is making some money, it is a good idea to have a credit card. 

When you are young and have some extra cash in hand, you would naturally tend to splurge them on some extravagance. This is absolutely normal for the age, but it is not always a good idea to spend all the money and then be unable to pay for necessities. 

Also, once you start earning, credit card companies will swarm you with offers of rewards and perks for getting a new credit card. It is a good idea to make use of these special discounts and offers and apply for a good credit card. 

Talking on this topic, Anil Pinapala, CEO & Founder of Vivifi India Finance, feels that credit cards should no longer be considered a luxury; they are now rather a necessity because they help you deal with situations, requirements, and lifestyle upgrades, especially for young earners who have just got their jobs and make a low salary.

For ages, our elders have advocated against credit cards, citing the fact that they are not as good as cash. They also advise us against the urge to overspend and getting trapped in a credit card debt trap. Which, though partly true, need not be the case for you. 

He also talked about how most of us have been taught to be afraid of credit cards because they are typically seen as a way to rack up debt. He goes on to say that not all debt is bad, especially if it meets your needs and aids in the development of your credit profile. He suggests that understanding how to use credit responsibly is a crucial financial skill for effective personal financial management. He claims that developing a practice of balancing your income and spending wisely allows you to obtain more credit as your profession progresses.

Credit cards are a great financial tool which can help you to save money and grow your credit score. The idea of a good credit card usage is using the credit limit to pay your bills, and repaying them within the interest-free period. This way, you will not have to pay interest on your credit card debt. But, the problem arises when users do not pay their bills on time. Or they overuse their credit cards and overspend, beyond their repayment capacity, and rake up a mountain of debt. That is where financial prudence is required. 

Another important feature of a credit card is the starting of your credit history with the credit bureaus. A ‘Credit Score’ becomes a vital part of your financial journey later in your life. To create and maintain your credit history, you need a few credits or loans under your name. As a new earner, you may not need any loans but getting a credit card is simple. And with the revolving credit you get with credit cards, it’s easier to develop and maintain your credit history. 

Remember these ‘golden rules’ while you use your credit card – 

– Never utilize more than 50% of your credit limit in any one billing cycle

– Use it to pay all your bills on partner websites and utilize the special discounts and offers

– Always pay your bills on time

– Use your reward points, discounts, air miles, and other offers wisely and selectively

– Never use your credit card to withdraw cash from an ATM or other machine

– Ask for periodical upgrade to your credit limit or card type

Credit Card EMIs

Credit card EMIs have become quite popular in recent years. Credit card EMIs allow you to make large purchases without the use of cash, and then convert them into smaller EMIs for convenient repayments. This is a very convenient way to use your credit card when you want to make a large purchase but can’t repay the entire amount in full the next month. If you are a frequent user and have a good credit history, you can use your credit card EMIs to make purchases such as electronics, furniture, cars, and so on. This way, your credit score will be boosted and you will get a better chance of getting a good loan in the future. 


Credit cards are a modern marvel in the world of finance. When used prudently, credit cards can be a great way to establish a good credit history. Credit score and credit history are important for new earners for their future financial security. Credit card EMIs are a very convenient option to maintain your credit score without having to restrict your spending. 

Considering the current inflation risk and its effect on the economy, new earners have to be careful with their credit card usage. It is a good idea to use credit cards for monthly bill payments and basic necessities, but not for large purchases. But we should also consider the fact that a credit card is the only credit option they can get as new earners.  

As new earners, it is important to remember that improper usage of credit cards can lead to debt trap. So one should not use credit cards to get stuff beyond their means. Also, don’t forget to follow the golden rules of credit card usage if you want to stay out of debt trap while improving your credit score gradually.

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