Getting the best credit cards is not a big deal if you have maintained a healthy credit score. You can get features and benefits, such as higher credit limit, reward, bonuses, cashback, 0% introductory APR, etc. However, if you are applying for the first time, you may find it challenging to get your first credit card.
So, if you are a first-timer, this piece of content is written for you. Keep reading to know how to get your first credit card in India:
Know your income
The first thing your issuing bank will check before approving your credit card application is your income. It indicates whether or not you have the repayment capacity. To be eligible for a credit card, you must check if your monthly income is enough to apply for one. If you are a salaried person, you will need to show your salary slips, form 16, or Income Tax return for the previous three years. As with a self-employed person, the late bank statement with a copy of IT returns would suffice.
If you do not have the said documents, you must avoid applying for a credit card unless you receive an offer from your bank. At times, banks offer credit cards to their savings account holders. You may get a credit card against your savings account too.
Check your credit score
After knowing your income, you will need to check your credit score. It is one of the crucial factors considered by your bank to determine your eligibility. It is a three-digit number that generally ranges between 300 to 900 that denotes an individual’s creditworthiness. A higher credit score increases your chances of getting the best credit cards in India. You will need to maintain a minimum credit score of 700.
If you do not have a good score, you can apply for your first credit card against security deposits, such as fixed deposits, bonds, etc.
You will get a lower credit limit
If you are applying for your first credit card, you might not get a higher credit limit. Since a credit card is an unsecured loan issued based on your credit history, your bank will take less risk and approve a lower credit limit on your first credit card. Once you learn to manage your credit card dues on time, your credit limit will gradually increase, which you can use to meet your financial requirements.
Carefully read the terms and conditions
Before applying for a credit card, it is imperative to understand the terms and conditions of your credit card. It contains information about interest charges, service charges, penalties, rewards, etc. Carefully read the terms on your credit card agreement and make sure that you agree with them before submitting your application online.
Multiple credit card applications can damage your credit score
Getting a credit card for the time can be a daunting experience. You make mistakes when filling out your credit card application. You may provide wrong information, such as your monthly income, address, invalid PAN number, etc. When you apply for a credit card, your issuing bank will run a verification check to see if everything is in proper order. Your application will get approved if the details you provided are correct.
Every time your application gets rejected, your credit score gets dropped. Therefore, multiple credit card applications can hurt your credit score, and with a low credit score, you will struggle to secure loans or the best credit cards in the future.
Have a savings bank account
It is necessary to have a savings account to get a credit card. But, having a savings account can increase your chances of getting a credit card if you are applying for the first time. If you hold a savings account and maintain it properly, your bank may approve your credit card application based on your banking transactions. So, whether you have a low credit score or applying for the first time, you can still get a credit card against your savings account, provided you have maintained a healthy transaction history.
Know about fees and other charges
Interest rate is not the only cost associated with a credit card. Other charges include Annual Maintenance Charge, Annual Fee, ATM Withdrawal Fee, International Usage Fee, Late Penalty Fees, etc. It is worth noting that the higher the features, the higher the number of fees you will have to incur. Before getting your first credit card, make sure to carefully read the ‘fees and charges’.