The total number of active credit cards has escalated 20% year-on-year upto 806.65 lakhs during November as per the latest information from the Reserve Bank of India (RBI). Despite this rise, overall usage of them has diminished to Rs. 1.15 Trillion in November. This indicates that people are becoming smarter in using their credit cards.
You can also leverage its advantages by using it sensibly. So, if you want to own a credit card to pay for your spending later, take a look at the credit card eligibility criteria.
Eligibility Criteria to Avail a Credit Card
Usually, the eligibility criteria for credit cards vary from one card option to another depending on the type of card you have chosen. However, there are a few common criteria, which you need to fulfil in order to avail a credit card. They include:
- An applicant should have Indian citizenship
- Age of the applicant must be at least 18 years
- The applicant needs to be associated with a reputable organisation
- The yearly income of the applicant must be at least Rs. 1.8 Lakhs
- Applicant needs to be either a self-employed or salaried person
- The applicant should retain a healthy credit score of 700 or above
Now before you meet these criteria, take a look at the factors that affect the eligibility for a credit card.
Factors Affecting Eligibility for Credit Card
In order to get your credit card application approved successfully, you need to understand the factors that affect your eligibility for a credit card:
- Credit Score
Having a healthy credit score and credit history will increase your chances of getting fast approval on your credit card application. With a low credit score alongside a poor credit history, your card card application is very likely to get rejected by the issuer or will allow you a low credit limit.
- Existing Debt
Apart from your credit behaviour, your credit card issuing company will also take your credit utilisation ratio into account. The prevailing dues on your credit card should not go beyond the usual limit, or else it can negatively affect your credit card application process.
You need to be associated with a reputed public or private sector organisation and should have a steady flow of income. Working with the current company for a year or more may increase your chances of getting approval for your credit card application.
Keep in mind that your place of residence is also considered by your card issuer while assessing your eligibility for a credit card. The reason is that there are several card issuing companies whose credit cards are not usable outside a particular locality, city, state, etc..
After you fulfil the above-mentioned credit card eligibility criteria, you need to gather the essential documents which you have to submit to your card issuing company.
Documents Required for Availing a Credit Card
Mentioned below is the list of essential documents required while opting for a credit card:
- ID Proof (comprise PAN card, Aadhaar card, ration card, voter ID card, etc.)
- Address Proof (comprise Aadhaar card, electricity bill, utility bill, rental agreement, etc.)
- Income Proof (comprise salary slips of last 3 months, bank account statements, IT Returns, Form 16)
Once you meet the eligibility criteria and collect the necessary documents, you are ready to proceed towards applying for a credit card.
Steps to Apply for a Credit Card
You can easily apply for a credit card online by following these easy steps as mentioned below:
Step 1: Visit the official website of your preferred financial institution
Step 2: Go the section of ‘Credit Cards’
Step 3: Take a look at the prevailing credit card options and their available offers
Step 4: Choose the credit card that suits you the best
Step 5: Insert your personal details such as name, mobile number, email ID, etc.
Step 6: Meet the eligibility criteria and upload the necessary documents accordingly
Step 7: Recheck your application form and other details
Step 8: Click on ‘Submit’
Upon completion of all these steps, your credit application will be successfully submitted.
Advantages of Credit Cards
Following are the noteworthy benefits of credit cards that you need to know before availing it:
- Acts as an emergency fund if you have little savings
- Helps in boosting your credit score
- Helps you purchase products on EMIs
- Provides cashback, discounts, and other special offers
- Offers insurance coverage
- Provides interest-free credit
What Do You Mean by a Credit Card Statement?
A credit card statement is a document that comprises the details of every transaction regarding purchases and expenditures of a credit card holder. This billing document is sent to you by the card issuer at specified intervals as soon as the billing cycle ends.
Being a prospective credit card user, it is entirely your responsibility to go through your credit card statement minutely. Doing so will help you figure out if there is any flawed entry, which you need to report instantly.
Having a comprehensive idea about credit cards alongside their necessary documents, eligibility, and application procedure will help you to use this card with diligence. However, before applying for one, go through the above-mentioned factors affecting credit card eligibility to ensure no rejection of your application.