While a credit card opens the door to reward points and quantifiable savings, it is a financial tool that comes with certain responsibilities. To make sure using credit benefits you and doesn’t deplete your savings, it’s important to understand certain aspects beforehand. So, take a look at 5 facts that you should know and then decide whether this financial tool is right for you.
You have to meet certain credit card eligibility criteria and submit documents
You can credit card apply online if you meet certain credit card eligibility criteria, which differ across issuers. Some of the common ones are:
- Having a credit score of at least 750
- Being between the ages of 25 and 65 years
- Having an existing relationship with the issuer
- Having regular and sufficient income
- Having no history of defaulting on credit in the past
On meeting the above criteria, you have to submit some documents to prove the same. The following are the common ones:
- Aadhaar card and/or PAN card as identity proof
- Driving license and/or utility bills as residential proof
- Passport-size photographs
Your credit history and score impact the terms of your credit card
Your credit history and credit score determine your creditworthiness. A good history and score of at least 750 implies that you handle credit responsibly and are capable of making payments on time. Thus, you earn the issuer’s confidence and can secure a high credit limit and low-interest rate. A bad score and history have the opposite effect.
Also, applying for multiple cards within a short time span implies that you are credit hungry, which may lead to the rejection of your credit card application. So, avoid frequent hard inquiries to always keep your score above 750.
Your credit card is useful when you choose the right type
Issuers are introducing various types of credit cards that are customized to meet varied needs. So, it is important to evaluate your personal requirements first and then apply for the right card. Once you track your spending habits, look for a card that offers discounts, cash-backs, and rewards on such spends. Once you do your analysis, you can apply for a travel credit card if you travel frequently or a fuel card if you regularly commute to work via a motor vehicle. Choosing a card as per your primary usage will help you earn maximum rewards and discounts.
Also, look for cards that give the most benefits at minimum charges. For instance, a Bajaj Finserv RBL Bank SuperCard is a power-packed multi-purpose credit card that also acts as a loan card, an ATM card, and an EMI card. All this is available at minimal annual charges!
You need to pay various charges on a credit card
Credit cards carry certain costs. These charges and fees are as follows.
- Joining Fee
- Annual maintenance fee
- ATM cash withdrawal fee
- International transaction fee
- Balance transfer fee
- EMI conversion fee
While some of them are recurring, others are one-time costs and some depend on your usage. The SuperCard is a true winner in this regard as it offers attractive features like 20,000 reward points as a welcome gift, a 90-day, interest-free personal loan as well as interest-free cash withdrawal from ATMs for up to 50 days.
You should pay your credit cards bills in full
Most credit card issuers allow you to pay just the minimum amount to avoid a late penalty. However, they still charge you interest on the balance amount due and so, in the end, you end up paying interest. Also, the issuer is likely to have a timeframe set for you known as the grace period. This is the time between your due date and the next online credit card payment. If you don’t pay the dues within this timeframe you will attract further penalties. In case you make a habit of this, you can rake up a high bill and land yourself into a debt trap.
Keep these credit card facts in mind when you apply for a credit card. To start enjoying the benefits, credit card apply online in a right away. To get started, check your pre-approved offer from Bajaj Finserv, view customized deals and expedite the process.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. You can find Gaurav on Linkedin.