Credit/Debit Card comes with free accidental insurance cover. It depends on the type of card...
Well, many of you must be afraid of Credit cards, as there is a conception that using a credit card is very risky and you have to pay high interest, but let me tell you credit cards can be used as the life savior in many situations. Credit cards help you financially as the banks provide many cashback offers and discounts on them. Many of you might not be aware of how to use a credit card. But here we are to help you out.
In this article, you can learn all about Credit card and their uses.
What is Credit Card?
A credit card is a piece of plastic, which allows you to borrow money from the bank. It is a mode of payment through which the client uses the money and pays later to the bank. The bank might apply interest on the used money or not, it depends on the bank policies.
How to use a credit card effectively?
If you already have a credit card, here are some of the tips which can help you out on how to use your credit card effectively:
Know your spending
Before applying for a credit card you must know your spending. First, know how much money you need for what? Analysis your expenditure and know what you spend more money on and what is suitable for your uses.
Too many cards
Using too many cards makes you lose track of spending. So, it is better not to use too many cards. There should be 2 credit cards not more or less than that. The less you use a credit card, then it will less difficult be to keep track and pay bills.
Cashbacks and discounts
Don’t miss the opportunity to get the credit card benefits like cashback offers and discounts. By using a credit card you can save a lot of money on your expenditures. There are various offers especially online which you can enjoy.
You often heard about online fraud, well you can protect yourself from these illegal activities. Never share your card details, OTP, CVV, passwords with anyone. Never login to your internet banking from public computers.
Pay bills on Time
Never roll up your bill, pay them before the last date. So, that you don’t have to pay last late payment fees or extra interest on the payment. Paying late bills will affect your credit score which will be bad for your future load and processes.
What Documents Are Required?
But if you don't have a credit card and looking for it here is the list that the bank will require some documents to provide a credit card. Here is the list of documents that are required while applying for a credit card.
- Filled Application Form
- Passport size photographs
- Id proof
- Address proof
- Salary slip
- Form 16 ( for employee)
- Bank statement
- Income proof ( for self-employed)
- Proof of business ( for self-employed)
What are Eligibility Criteria?
The bank doesn’t allow everyone to have a credit card. The eligibility criteria depend on the bank. These are some of the common rules which are followed by every bank.
- Minimum age should be 18 years to apply for a credit card.
- Minimum salary should start from Rs. 1 lakh and Rs. 3 lakhs
- The applicant must be earned, either self-employed or business
- The applicant must be an Indian Citizen. However, this condition depends on the choice of your card.
The bank doesn’t provide everyone to use a credit card. As the design of the service, it allows customers to use the services first and pay later. Besides the eligibility criteria, there are other factors too that affect the eligibility criteria.
- CIBIL Score: Also known as Credit Score, is used to measure an applicant’s potential of paying back the used amount.
- Debt: The existing debt also affects your approval. The banks will analyze, how much money already the applicant has used from the market.
- Financial status: The financial status of the applicant affect your chances of getting a credit card. But if you stick to the same company for more than a year it will add brownie points to your application.
- Geographical barrier: The location also affects the application as some of the cards are only available for some of the cities.
Here are all the details you need for the credit card. Now get your own credit card and get rid of all the worries. You can enjoy unlimited reward points, and track your expenses online.