Credit cards are one of the best financial tools in present times. If you use them wisely, you can build a good credit score. They also give you numerous discounts and benefits over other payment mediums. Applying for a credit card for the first time can seem daunting. After all, there are so many banks offering several credit cards. To choose the one that best suits you, you need extensive research. Worry not, for we have done that for you.
What is a credit card?
A credit card is a medium that allows you to use money, in advance, within a set limit every month. You have to pay that amount, charged as a credit bill, to the bank every month. With a credit card, you can manage your expenses. It leaves you with the freedom to invest your money and gain interest. You have to pay back the money to the bank every month.
A credit card has many other perks, including discounts and interest. If you pay your credit bills on time, you will also have a good credit cibil score.
Eligibility criteria for a credit card
Before getting to the question of how to apply for a credit card, we need to know its eligibility criteria. These criteria include:
- The applicant should be at least 18 years of age.
- The applicant should have the minimum income required to apply for the respective credit card.
- The applicant should have the relevant documents.
Factors to keep in mind before applying for a credit card
Choosing a credit card that suits your needs and gives you the best possible advantages is imperative. Here are some things to consider before applying for a credit card.
Your monthly income is the primary factor determining the kind of credit card you get. You should calculate your monthly salary and research the types of credit cards available within that range.
Your income is a reflection of your repayment capability. If you have a low income, you will get a credit card with a lower credit limit and vice versa. Therefore, if you desire a credit card with a higher credit limit, you should consider advancing your career before applying.
2. Interest rates and fees
When you use a credit card, you have to pay an interest rate as part of your credit card bill. Along with this, banks also charge you annual fees, transaction charges, and late fees. You should do an extensive search on the different banks and their various offers on credit cards. Choose a bank that offers you the best interest rate with minimal miscellaneous charges.
Many banks allow you to use your credit cards without any interest rate in the initial few months. Most banks don’t take any annual charges for credit cards. You should look at all these factors and fit the appropriate permutation. It is the best way to go about choosing a credit card.
3. Late Payments
Many individuals ignore the aspect of late payments on a credit card. If you are not financially disciplined, credit cards can become a nightmare. You need to pay your credit bills on time every month. The consequences of defaulting on your credit bills are extensive. You will have to pay extra money as a late fee. If you continue defaulting on your credit card bill payment, the bank will start charging more interest rates from you.
Most importantly, making late credit bill payments will negatively impact your credit score. It can harm your chances of getting discounts and other benefits. Lenders will also hesitate to provide you with a loan if you have a poor credit score.
4. Online accessibility
Your credit card should have online features like a mobile app. You should be able to register your credit card online and avail of the facilities. It will include:
- Tracking daily expenses and available balance.
- Making transactions from the comfort of your home.
- Getting timely updates on any new policies or services on your credit card.
- Monthly e-statements sent to your registered email id.
Choose a credit card that helps you avail all of these benefits.
5. Reward points
All types of credit cards allow you to gain some reward points. You can utilise these points in some of your transactions. You earn these points by making specific transactions at specific periods. The reward points you get depend on the credit card and the bank.
You can use these reward points to get discounts on flight tickets, dinners, and shopping. Choosing the bank that gives you the best chances of getting more reward points and redeeming them should be one of your priorities.
How to apply for a credit card?
The application process for a credit card has been made simple and efficient. All you have to do is to fill in the required forms and submit the documents at the bank office. You need to follow the given steps to complete this process.
- Register on the online site of the respective bank.
- Fill in your details.
- Choose the credit card for which you want to apply.
- Submit the relevant documents.
- Click on the submit button.
Now that you know the process of applying for a credit card, go ahead and apply for the one that best suits your needs.