In 2019, the total transaction value with credit cards in India rose to Rs.1.47 lakh crore, and is only set to increase this year. This notable expansion of the credit card market in recent years is evidence that more people are opting for this handy payment tool to carry out their day to day purchases.
Nonetheless, before you get a credit card, you must keep in mind the following pointers.
Eligibility criteria –
Before you apply for a credit card, check the eligibility criteria to make sure you satisfy all the conditions as specified by the lender. Otherwise, your application stands a chance of rejection. The basic requirements that every applicant should meet are given below –
Applicants should be a resident of India.
They should have a CIBIL score of 750 and above.
Applicants should also have a favourable credit report with no history of default in repayments.
They should also be within 25 – 65 years of age.
However, the eligibility criteria may differ slightly based on the applicants’ profile and the card issuer.
Documents required –
The list of documents required during a credit card application is as follows –
KYC documents such as PAN card, Aadhaar card, Voter ID card or any other officially valid document.
Proof of income like Income Tax Return, Form 16, latest salary slip, etc.
Passport size photograph.
You must keep the documents handy before applying to streamline the application process.
There are various fees associated with these cards that you should know about before you get a credit card. These include –
Interest charges – you will be charged interest on the amount of bill if you do not pay it off within the due date.
Late payment fees – If you do not pay off the whole amount within due date, you will be charged late payment fees as well.
Foreign transaction fees – You will be charged an additional amount if you carry out transactions in a foreign currency, or have withdrawn money from ATM situated outside India.
Annual fees – When you first get a credit card, you will have to pay a certain amount as joining fees. After that, credit card companies charge a specific amount yearly as an annual maintenance fee.
Credit card statement–
It carries essential details regarding all the transactions that you have carried out with your card during the billing cycle. Your billing statement will also have details regarding –
Total amount due
Minimum amount due
Payment due date
Opening and closing balance
Credit limit available
Total reward points earned
Reward points redeemed
You need to know how to read your credit card statement carefully to understand how it works and to keep a check on any unauthorized transactions. You can also opt to receive your statement through either offline or online mode.
Reward programs –
Most credit cards come with reward programs whereby you can earn points with every purchase. You should, therefore, know how to redeem your credit card reward points to avail discounts, cash backs and gift vouchers.
Apart from purchases, one can also earn reward points as a welcome bonus and on reaching certain spending milestones. With cards, one can also redeem reward points to make down payment on EMI purchases at partner stores.
The card issuer also provides pre-approved offers for a smooth and quick credit card application procedure. Besides credit cards, these offers can also be availed on other financial products like business loans and personal loans.
There are various credit card types available in the market such as online credit card, credit cards for students, fuel credit card, business credit card, etc. Hence, you must opt for a card that is most suited to your financial needs.
Nonetheless, read the terms and conditions set by the selected card issuer before you get a credit card. Also, choose a suitable credit limit and pay off the outstanding amount within the due date to make the most of its benefits.