Applying for a Credit Card? 5 things to consider
A credit card is a powerful tool that gives you access to funds to meet your financial needs, small or big, in a jiffy. You can transact easily and conveniently using your credit limit and pay for a range of things like your home loan EMIs, flight tickets, fuel, and much more.
Considering the importance of credit cards given India’s shift to a cashless economy, issuers today are offering feature-rich cards to suit specialised needs. When faced with unending choices, you may find it tricky to choose one. Therefore, it’s important to take a look at these 5 crucial things before applying for a credit card.
Choose the right type of credit card
With a sea of credit card options and lucrative offers, you may be tempted to apply for the first credit card that comes your way. However, every credit card is designed to serve a distinct purpose. So, apply for one after evaluating your spending habits and requirements.
Next, look for a credit card that offers sizeable rewards points, cashback, discounts, air miles, and other benefits depending on your expenditure patterns. For instance, applying for a travel credit card if you are a frequent traveller will help you earn air miles on purchases, which you can use towards booking air tickets. It will also offer airport lounge access, discounts on bookings, and give you access to other targeted rewards that help you save money. Likewise, if you are a movie buff, avail a credit card that offers exciting benefits on movie ticket bookings on a monthly basis.
In order to apply for a credit card, you are required to meet credit card eligibility criteria stated by the issuer. These terms and conditions are used by the issuer to assess your creditworthiness and repayment capacity. Based on how you qualify, your credit limit is fixed. Following are the common criteria you need to abide by when applying for a credit card.
* You should be aged between 25 and 65 years
* You should earn a regular income
* You should be an existing customer of the issuer
* You should have a minimum credit score of 750
* You should have a clean credit report, clear of defaults
Note the charges that come with the credit card
In exchange for the credit limit, an issuer will charge you certain fees. This can be a joining fee, ATM withdrawal charges, annual maintenance fees, transaction charges, and penal interest for late bill payment, amongst others. Thus, it is your responsibility to enquire about such charges before signing up for a credit card, so you can choose a card that offers maximum benefits at a minimal cost.
A Bajaj Finserv RBL Bank SuperCard, for instance, allows you to make interest-free ATM cash withdrawals from your credit limit for up to 50 days. Thanks to this exclusive benefit, you can withdraw cash during emergencies at no extra cost and repay it before interest is applicable on it.
Pick a card that offers accelerated rewards
Most credit cards today offer bonus rewards points for specific transactions. To maximise benefits, choose this type of credit card. For instance, Bajaj Finserv RBL Bank SuperCard offers up to 20,000 reward points as a welcome gift. You can also get extra reward points when you cross spending milestones.
Make paying credit card dues in full a habit
Though credit cards offer innumerable benefits, mismanaging your card can result in a whirlpool of debt. To enjoy the perks without any stress or interruption, pay your credit card bills on time and in full. Issuers issue a bill every 25 to 31 days and also offer a grace period of 20 to 60 days. If you don’t pay your dues within this timeframe, the issuer charges you an interest rate of up to 48% on the outstanding balance. Most issuers offer to let go of the late penalty if you pay a minimum amount against your bill. However, you still have to pay interest on the balance amount due. This continues until you clear all your dues. So, refrain from defaulting on payments to keep your finances healthy.
With a fair understanding of the important considerations to make before taking a credit card, apply online or offline. To get started, check your pre-approved offer from Bajaj Finserv. All you have to do is submit simple details like your name and contact number to enjoy customised deals and instant approval.
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