Do You Know What a Credit Card is and How to Get It? Here are the Answers
Under current circumstances, it can be challenging to meet day to day financial requirements. Irrespective of monthly earnings, savings, and investment returns, individuals may need further financial assistance to manage their daily expenses. And, a credit card can be one of the best solutions that can help to meet their everyday needs easily.
Credit card meaning suggests an alternative of formal credits that borrowers can avail from various financial institutions. Depending on issuers, credit cards can be of several types with different benefits. However, the fundamental characteristic of these cards is that individuals can borrow credits from a pre-sanctioned limit issued by lenders to pay for their expenses.
Following is an elaboration on the procedure to avail credit cards in India.
The application process of credit cards
Following are a few parameters that one must be mindful of to apply for a credit card that suits his/her financial obligations -
- Selection of the credit card
Card users should remember that these payment cards can impact their credit profile both positively and negatively. Thus, they should use these cards with responsibility and knowledge. Moreover, as credit card meaning also signifies a financial liability towards financiers, borrowers should look for some elemental aspects of these cards before selecting any. These include -
- Assessing own spending pattern
Firstly, applicants should figure out their expense habits by checking previous financial statements. In other words, they need to understand, on what avenues they tend to spend more. Based on their expenditure habits, borrowers can look for credit cards that facilitate those specific spending. It is the primary information to know how to get credit cards.
- Reward programs
One of the most attractive features of these cards is the incentive structure. Applicants should opt for cards that offer multiple benefits like discounts on purchasing, reward points, cashback, coupons, vouchers, etc. Moreover, borrowers also need to know where they can redeem these points or advantages so they can manage expenses cost-effectively.
Borrowers can consider NBFCs like Bajaj Finserv that offer Bajaj Finserv RBL Bank SuperCard with various incentives that can be useful in several future transactions.
- Credit limit
The credit limit is nothing but the total borrowable amount that cardholders can use to pay for their expenses. Financiers fix this limit based on the credit history and monthly income of applicants. However, card users should always try to keep their credit utilization ratio low to maintain a good credit profile. That means, the expenses on cards should not cross a certain threshold of their credit limit.
Hence, borrowers should look for lenders that can offer a higher credit limit with simple documentation.
- Rate of interest
The interest rate or APR on credit cards is applicable only if the monthly bill is not fully paid. Typically, this APR is quite high on cards. However, it differs across the lenders and type of card availed.
- Penalties and fees
Other vital aspects that can accumulate substantial payable amounts are charges and penalties. It can include fees like processing charges, annual fees, transaction charges, late payment fees, balance transfer charges, etc. Therefore, applicants should go with financiers that offer minimal charges.
- Check the required documents and eligibility parameters
After deciding the perfect card, individuals need to check the qualification criteria and necessary documents for that specific card. Even though these parameters can change across the card issuers or products, some basic requirements remain the same.
Indian residents whose ages are between 25 and 65 years with above 750 CIBIL score are eligible to apply for credit cards. Also, based on the residential area and lender, a minimum stable income is necessary.
Documents to be submitted include all the KYC documents, PAN, financial statements, Form 16, payslips, etc. A financial organization can ask for more documents if needed.
- Application form submission
On meeting all the eligibility parameters, borrowers can apply for a preferred credit card online in three steps. At first, they need to visit the authorized website and submit the filled-up application form with correct details. A representative can contact to collect the documents that can verify the details. On successful verification, borrowers can receive the card by post within seven working days.
Nonetheless, as said earlier, credit card meaning signifies both responsibility and liability from a borrower end. Thus, they should know how to use a credit card wisely before applying for it.