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Choosing the right credit card can provide significant financial flexibility, help build your credit history, and offer rewards like cashback or travel perks. To get started, it's important to understand the process of applying for a new credit card and how to make an informed choice.
The following 5 key steps guide you through the entire process, from checking your eligibility to receiving your new card:
Before applying for a new credit card, it's essential to check if you meet the eligibility requirements set by the bank. Common factors considered include your age, income, and credit score.
Typically, you need to be at least 21 years old, although this may vary by issuer. Your income plays a role in determining the type of credit card you can apply for, with higher-income earners qualifying for premium cards. It's also important to check your credit score, as a higher score usually increases your chances of approval. Most banks require a score of at least 750 for premium cards, but there are options for people with lower scores as well.
If you're wondering how to get a credit card when your credit score is low, a secured credit card may be a good option. These cards require a deposit as collateral, which reduces the risk for the lender. Using a secured card responsibly can also help you improve your credit score over time.
Checking your eligibility first will save you time and help you apply for cards that align with your financial profile.
Once you've confirmed your eligibility, it’s time to compare credit card offers. When selecting a card, consider the following factors: rewards, interest rates, fees, and additional features like cashback or travel benefits.
Credit cards come in many varieties. If you travel frequently, you may benefit from a card that offers air miles or access to airport lounges. For everyday purchases, a cashback card could be more advantageous. Be sure to check the annual fee, as some cards charge a significant fee while others may offer no-fee options. Interest rates are another important consideration, especially if you plan to carry a balance.
When choosing the best credit card deal, it’s important to evaluate all the features and determine which card will offer the most value based on your spending habits. For instance, if you spend a lot on dining or travel, a card with higher reward rates in those categories would be ideal.
By thoroughly comparing all available options, you can ensure you’re getting the most suitable card for your needs.
Once you’ve chosen the right credit card, the next step is to gather the necessary documents for your application. Banks and financial institutions typically require a few key documents to process your request.
The most common documents include:
Proof of identity (e.g., passport, Aadhar card, or voter ID)
Proof of address (e.g., utility bill, rent agreement, or bank statement)
Income proof (e.g., salary slips, bank statements, or tax returns)
Photographs (in some cases)
Make sure all your documents are up to date and match the information you’ve provided on your application form. If you're self-employed, you may need to provide additional documents like business registration details or income tax returns.
Having the right documents prepared can speed up the application process and increase your chances of approval.
After gathering all the necessary documents, it's time to submit your application. You can apply for a new credit card either online or offline, depending on the bank or financial institution.
Online application
Most banks offer an easy-to-use online application process through their websites or mobile apps. Online applications are convenient, and you can track your application status in real-time. Fill in the required details, upload the necessary documents, and submit the form. Some banks may even allow you to complete the process using eKYC for quicker approval.
Offline application
If you prefer, you can visit the bank’s branch and submit your application in person. You'll need to bring along your documents for verification. Although the offline process may take a bit longer than the online route, it offers the advantage of in-person assistance if you need any clarification.
Once your application is submitted, the bank will review your eligibility and documentation. Be prepared to answer any follow-up questions they may have to ensure a smooth approval process.
After submitting your application, the approval process begins. This typically takes a few days to a few weeks, depending on the bank’s internal processes and your financial profile. Banks assess your application based on factors like your credit score, income, and the documents you’ve provided.
However, approval times can vary. If all your information is in order and you meet the eligibility criteria, approval can happen within a few days. However, if additional verification is required, it may take longer.
You can track your application status through the bank's website or mobile app. Once approved, your credit card will be mailed to your address. Ensure that you review the card's terms and conditions and activate it as soon as you receive it to start using it.
To make the most of your new credit card, keep these helpful tips in mind:
Many banks offer incentives like cashback or reward points for new cardholders. Check if your card offers any such bonuses and use them wisely.
Some issuers may be open to waiving the annual fee for the first year or offering lower interest rates, especially if you have a good credit score. Don’t hesitate to ask for better terms.
Cards may offer higher rewards on specific spending categories, such as travel, dining, or groceries. Make sure to use your card in these categories to maximise your rewards.
Review all the features your card offers, such as travel insurance, airport lounge access, or cashback offers. Make the most of these perks to add extra value to your card.
Some credit cards may have hidden fees, such as foreign transaction fees or penalty fees for late payments. Be sure to understand all the charges associated with your card.
When applying for a new credit card, it’s easy to make mistakes that can affect your approval chances or your financial wellbeing.
Avoid the following common pitfalls:
Multiple credit card applications in a short period can negatively impact your credit score. Each application results in a hard inquiry on your credit report, which can lower your score and suggest to lenders that you’re a high-risk borrower.
While some premium cards offer attractive benefits, they often come with high annual fees. Be sure to weigh the benefits against the costs before committing to a high-fee card.
If your credit score is low, you might not qualify for some of the best credit cards. It’s essential to check your score before applying to ensure you’re applying for a card you’re eligible for.
Failing to read the fine print can lead to unpleasant surprises, such as hidden fees, high-interest rates, or complicated reward redemption processes. Always review the terms before signing up.
Many credit cards offer specific benefits like cashback, rewards, or travel perks. Not fully understanding these benefits means you may miss out on opportunities to maximise your card's value.
By avoiding these mistakes, you can improve your chances of approval and ensure that you’re choosing the right card for your financial goals.
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| 1min read
Posted on 16 May
Roshani Ballal
Academy by Bajaj Markets
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