As per the Reserve Bank of India, as many as 10.1 million credit cards have been added to the lending market in a span of one year, from July 2018 to July 2019. Furthermore, credit card transactions at POS terminals are also increasing at a year-on-year growth rate of 23%.
Nonetheless, some essential eligibility criteria laid down by card issuers determine who can apply for credit card. Hence, interested individuals must know the eligibility criteria before applying for these financial instruments to avail them. Also, know that although you can apply for one both online and offline, the former is much easier and hassle-free, which makes it a preferable mode of application.
Eligibility criteria for credit cards
Financial institutions take substantial financial risks when providing credit cards to customers. Thus, they lay down certain eligibility criteria that one needs to meet while applying for credit cards, both online and offline. Here is a list of common criteria individuals must fulfil when they apply for credit cards.
- Credit score eligibility
Individuals must have a credit score of 750 and above to become eligible as someone who can apply for a credit card. A credit score is an analysis of credit and payments history of individuals. Defaults in payments or an outstanding advance affect the credit score negatively, whereas in-time payments help individuals maintain a high credit rating. Thus, by evaluating the credit score, financial institutions analyse an applicant’s ability to repay debts.
- Criteria for minimum and maximum age
Individuals must also be within the age range of 25 and 65 years to be eligible to avail a credit card.
- Employment status
Moreover, applicants who can apply for a credit card must be salaried individuals with employment in an MNC, public or private company. Plus, self-employed individuals are also eligible to apply for credit cards. In both cases, the annual income as well as income stability of the individual is gauged before offering the credit card.
- Nationality of the applicant
Applicants who are the citizens of India residing in the country can apply for credit cards from any financial institutions. Plus, to avail credit cards like the Bajaj Finserv RBL Bank SuperCard that bring industry-first features and benefits, applicants must also live in specified locations within the country.
Documents required for credit card application
Individuals also need to submit some required documents for credit card approval to establish their eligibility and financial standing. When applying online, it makes the submission of such documents simpler. Following are the required documents to validate the applicant’s eligibility.
- Identity proof such as Aadhaar Card, PAN Card, Passport, etc.
- Address proof such as Voter ID card, Driving License, etc.
- Latest salary slip.
- Account statement of at least the last 3 months for self-employed individuals.
- Other financial documents like Form 16.
Once you have met the required eligibility, you can proceed to apply for your credit card online and submit necessary documents for a hassle-free approval. Know that not fulfilling these criteria will make you ineligible for such credit instruments.
Individuals who can apply for credit cards must also make wise use of this credit instrument to avail maximum benefits.
How to use a credit card?
A credit score reflects the creditworthiness of an individual. As the use of credit cards also contributes to building up such a score, the payment card must be used wisely, among other reasons. So, check out how to use a credit card wisely to make the most of it.
- Timely payment of the bill
Individuals must make credit card bill payment in time. It is because late payments accumulate unnecessary fines and penalty charges. Also, with timely payment, individuals can expect an improvement in their credit score.
- Keeping a track all expenses
Credit cardholders must keep their expenses within their repayment capacity for better financial management. Thus, it is ideal to keep track of their expenses made via the card by checking their monthly statement regularly. So, it is also important to know how to read the credit card statement correctly.
- Availing a suitable credit limit
The credit limit is the threshold beyond which a borrower cannot spend with his/her credit card. Individuals should be careful while opting for this limit. They should set a limit depending on their monthly income, fixed obligations, and other necessary expenses so that they can repay the amount without encountering any financial crunches.
As for credit card applications, Individuals who can apply for credit cards must make sure to meet all the basic eligibility criteria for approval. Furthermore, borrowers must need to be responsible in bill payment and opt to pay the total amount due instead of the minimum due payable for a better impact on their credit rating.