Required documents and eligibility for credit card
A credit card can turn out to be beneficial for you during troublesome times or even during financial stagnation. It can equip you with contingency funds to overcome the problematic financial phase or get over the surmounting debt.
India is becoming a digital economy and has several platforms offering instant credit card approval plans, the use of credit cards is expanding and is deemed to be one of the most feasible choices for payment. Credit cards do offer a variety of rewards and benefits on almost every transaction you make using it. If you know how to manage your credit card appropriately, it is undoubtedly a boon to you. In case you fail to do so correctly, you may end with a low credit score and high debt. There are steps we need to keep in mind when we apply for a credit card so that we do not grieve later on our negligence. To help you in this here are the things you need to consider before you apply for a credit card and to utilize it best.
Know the fees and interest rates
Looking for anything online, be it a Television or a Mobile Phone or your credit card always make a point to know the fees, interest rates, and the privileges it would offer you. There are numerous credit cards provided by the banks and financing agencies to match your expectations and needs. Thus having proper research can help you avail the credit card that fulfills your needs. Depending on your requirements, you can go for a simple credit card to a cooperate credit card as per your lifestyle. Thus to get the best credit card, you need to be aware of your own needs. Continuously look for a card rendering favorable interest rates and perks on your purchases.
Since credit cards do come with a joining fee and an annual fee, thus in case if you are taking a credit card to pay off debt, then you should opt for a card that has a low joining and annual fee.
Be aware of your credit card eligibility
You should always consider your eligibility before applying for a credit card to avoid your application being rejected. Determinants such as your credit score, credit history, and income statements perform a tremendous role in the approval of your credit card. Generally, a credit score above 750 is considered as an ideal score. Monitoring your credit report would help you understand your financial stability in a better manner.
Do possess all the essential documents
While technology indeed eases your workload of applying for the credit card, it is also mandatory to submit all the necessary documents with the financing agency, like government-issued photo ID cards such as Aadhar Card, driving license, PAN card, also address proof like electricity bills, water bills and telephone bills. The requirement of credit card documents is different for a salaried and a self-employed professional in terms of income proof.
For a salaried individual, the must-have documents are:
Salary slips for the last 3 months
Bank statements for the past 6 months
For a self-employed professional, the must-have documents are:
Proof of business continuity and ownership
Latest CA certified IT returns
Keep these documents ready with you when you apply for a credit card. But, if you are applying for a credit card online, you need to upload these documents to the portal.
Ensure credit utilization doesn’t exceed 20-30%
Even if you are a first-time credit user or not, it’s always prudent to keep the credit utilization limit between 20-30%. This allows you to have the exact required credit score because it gives a strong impression to your respective bank and has a positive impact on your credit report. The credit card has become an essential resource in India that is moving towards a cashless economy. Thus it gets crucial to analyze how one can make the best use of it. These tips can be of surely a great help to you in case you want to apply for a credit card that fits best to your needs.