Credit Cards have become a necessity for many urban Indians today. Knowing how to apply for a credit card and the right one at that can help you with lower interest rates and higher rewards/savings on daily purchases.

From being a handy tool for large payments to giving you peace of mind for all kinds of payment needs, credit cards are more popular now than ever before. Almost every major bank issues credit cards of various formats carrying various offers. In this article, we cover how to apply for a credit card and the different benefits that can be availed with it.

Before you apply for a credit card: Check Your Credit Score

A lot of people do not completely understand the importance of one’s credit score. Every customer has a credit score that credit card companies check to make sure customers are creditworthy. Banks check for previous repayment history, Credit vs Salary ratio, Credit used vs Credit available ratio among other things to check customer’s credit worthiness. Learn how to check your CIBIL scorefor free.

Minimum Credit score for Credit Card

There is no minimum credit score for credit cards as such mandated by banks. However, those who have a CIBIL score above 750 are highly likely to qualify for most credit card offers. Those with scores below 650 are unlikely to qualify for most credit cards.

Are You Eligible For A Credit Card?

Some of the basic requirements outside credit score are:

  • Age: Most banks require credit card applicants to be at least of 18 to 21 years of age to apply for a credit card.
  • Salaried job / Self-employment with income proof: Having a salaried job is mandatory for many credit cards. Self employed people can get access to many credit cards provided they furnish satisfactory income proof.
  • Minimum Salary: Many credit cards have a minimum salary requirement. HDFC for example asks for a minimum salary amount of INR 2 lakhs per annum to be eligible to apply for a credit card.

Which bank to choose?

The first step to apply for a credit card is to check if the bank you’re associated with provides credit cards. Most banks offer pre-approved credit cards on salary accounts. One can check on their bank’s home page to see if you have a pre-approved credit card. This should be a great start point.

Keep in mind that different banking companies provide different interest rates and reward offers. It’s your choice to thoroughly read the terms and conditions and pick the offer that’s best for you. This could be based on your earnings, spending patterns, ability to pay on time etc.

How To Apply For A Credit Card?

Once you’ve made a choice on the credit card offer you like, you’re ready to start filling out the the credit card application form. This procedure is fairly standard and shouldn’t take too long.

  • Your personal information: Name, address proof, contact, identity proof, PAN and other standard documents.
  • Employment status: Salaried employee or self-employed.
  • Employer details: Name of company.
  • Salary / Income: The biggest factor in deciding the status of a  credit card application is salary / income. This allows the bank to confirm your eligibility (more on this below).
  • Credit history: Enter the details of your previously owned credit cards or bank loans. This will allow the bank to review your credit history and conduct a risk assessment.
  • Offer choice: Select the credit card you want to opt for.

Healthy credit card usage

A purchase with a credit card is basically equivalent to a short-term loan. If you pay your bill in full every month, you will not need to pay any interest. Interest gets charged on the balance if the amount is not paid back in full before the due date. It is extremely important to go through the terms and conditions regarding interest rates and due dates before applying for a credit card. A healthy credit card habit is to pay back your full due amount prior to due date every period.

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