What Should You Know Before Applying for a Credit Card Online?

Credit cards are one of people's most commonly used financial instruments to make lump-sum purchases. Banks offer credit cards to the customers in the form of short-term borrowing, where a specific amount of money is utilised by the cardholder in a month, and the cardholder repays it to the bank at the end of the billing cycle with interest.

There are various things that people should be aware of before they apply for a credit card. Banks and financial institutions offer different types of credit cards that cater to people's various needs, goals, and budgets. Apart from perks and benefits, there is a different credit card eligibility for different credit cards. 

Basic Criteria for Credit Card Eligibility 

There are some basic criteria for credit card eligibility -

• Nationality - Generally, people of Indian origin apply for a credit card. The NRIs can also apply for a credit card in some banks and financial institutions.

• Applicant’s Age - The general eligible age to apply for a credit card is 21 years. Some banks also consider 18 years old as eligible applicants. However, banks and financial institutions believe that there is comparatively less risk for a 21 year old to become a defaulter as they are financially more stable.

• Applicant’s Address - Banks and financial institutions also have certain exclusive credit cards that are available in only Tier 2 and Tier 3 cities. It is so because there are certain perks and benefits of the credit card from partnered brands and stores that cannot be availed in semi-urban and rural cities and towns. Therefore, applicants from rural or semi-urban areas cannot apply for those credit cards.  

• Stable Source of Income - Different types of credit cards have different types of income requirements. It is so because certain maintenance charges must be paid by the cardholders irrespective of the credit card usage. The financial capability also helps banks and financial institutions to identify the applicant’s lifestyle and repayment capacity.

• Occupational Status - Another important credit card eligibility factor is the occupational status of the applicant. In case the applicant is a salaried individual, the employment tenure of more than a year makes a positive impact and increases the chances of getting an application approved. For self-employed individuals, the liabilities, turnover, etc., are taken into consideration.

• Credit Score - The credit score is a crucial element of credit card eligibility. People who wish to apply for a credit card must check their credit score before applying. The ideal score required for application approval is 750 or above.

Factors That Influence Credit Card Eligibility 

Certain factors might influence your credit card eligibility and application approval -

• Credit Score - Banks and financial institutions analyse the creditworthiness and repayment capabilities by checking the applicant's credit score. If an applicant's credit score is 350 or below, there is a high chance that their credit card application will be rejected. If the credit score is between 350-750, the institutions might consider the application based on other factors, however, if the credit score is 750 or above, there is a high chance that the banks and financial institutions will approve your credit card application. Therefore, check your credit score online before you apply for a credit card.

• Liabilities and Debts - During the evaluation of the income stability, banks and financial institutions identify the existing liabilities and debts of the applicants. If the liabilities and debts are short-term and do not majorly influence the repayment capabilities of the applicant, the application will be approved. A major influence of existing debts and liabilities on the applicant’s income will negatively impact the credit card eligibility and application approval.

• Occupational Stability - Banks and financial institutions take the balance sheets, profit ratios, etc., into consideration to analyse the stability of the businesses and ventures for self-employed individuals, whereas, for salaried individuals, their stability is evaluated with the working tenure with the firms. Suppose the applicant has a record of switching companies or firms quite often, that causes discrepancies in the income graph of the applicant. In that case, there is a high chance that their credit card application will be rejected.

FAQs

• What is the minimum salary required to apply for a credit card?

Generally, to apply for a credit card, the applicants should earn a minimum of Rs. 25,000 monthly. However, banks and financial institutions have different norms and policies for different types of credit cards.

• What is the minimum credit score for credit card eligibility and application approval?

The ideal credit score is 750 or above, however, if the credit score of an applicant is between 350-750, there is a chance that they are eligible for a credit card and will get approval on their application. 

• How to apply for a credit card online?

To apply for a credit card online, the applicants can visit the official website of banks or financial institutions. To get a hassle-free experience, applicants can apply for a credit card application via Bajaj MARKETS online portal or mobile app.

• I have joined a company six months ago. Can I apply for a credit card?

A working tenure of more than a year in a company with a stable source of income makes a good impression during the credit card application process.

• I pay housing loan instalments every month without being a defaulter, can I apply for a credit card?

Yes, you can apply for a credit card. The existing debts and liabilities concern banks and financial institutions, however, there are various factors like income stability, type of credit card, credit score, etc., that are collectively taken into consideration during application review.