A credit card can fund all your dreams and requirements. It is a line of credit that is always in your pocket. All you need to do is swipe your card or type in the magic numbers to make your dreams a reality. Credit cards also come loaded with a ton of benefits such as rewards programs, promotional offers, and extensive discounts. But all these benefits come with terms and conditions also. Understandably, all this information is likely to make you excited about applying for a credit card. So, if you are on your way to apply for one, read the following FAQs to clear all your doubts about the credit card application process.
How Is A Credit Card Different From A Debit Card?
Credit cards, unlike most debit cards, are similar to taking a personal loan. It requires a bank or lending institution to review an application and approve you for creditworthiness. Credit cards allow consumers to complete transactions for the purchase of various goods and services against an approved line of credit. In case of debit cards, there is a real-time deduction of the amount from your savings or current bank account.
How can I apply for a credit card?
You can apply for a credit card online on your bank’s website. Pick the credit card which suits your lifestyle and your needs. Once finalized, fill the application form linked to that credit card online. The bank’s representatives will contact you by phone or email to complete the remaining formalities.
What are the parameters based on which the bank approves the application for a credit card?
The bank will look at your creditworthiness and repayment capacity before approving you for a credit card. Your repayment capacity is judged through your income and your existing debt. Your creditworthiness is evaluated through your credit score. A credit score of 750 and above is good.
Can I get a credit card without having a credit history?
Yes, there are credit cards available in the market for which a prior credit history is not a prerequisite. If you do not have any credit history, then a fresh file for your credit score/ history is created with one of the credit bureaus. You will receive your card upon approval.
What are pre-approved credit cards?
Pre-approved credit cards are offered by banks that have already checked your creditworthiness from a credit bureau. It means that you meet the bank’s criteria for an open line of credit, and they pre-approve you for their credit card. But there are other factors as well that may affect your application. So, the bank may still accept or reject your application.
Are there any application fees or charges?
No, usually there is no application or processing fees for credit cards. However, they may come with annual charges. You can talk to your lender to know about the criteria for waiving these charges. Many customers choose to pay a yearly fee to have a premium card with a generous rewards points program.
Applying for a credit card online is generally a hassle-free process. However, it is advised to read all the terms and conditions and enquire about all the hidden costs and charges before applying.