Decoding Credit Cards
Credit Cards
Credit cards are most helpful when large transactions are to be carried out.
When a transaction is made using a credit card, the bank first makes the payment on behalf of the cardholder and then collects payment at the end of the month.
This is helpful for individuals who do not carry cash while making payments for groceries, fuel, and more.
Credit Checks
There are a vast number of financial authorities which issue credit cards in India.
When an individual decides to apply Citi credit card, he or she has to fill up an application online, on the basis of which the bank accesses his or her credit report.
The credit history helps the bank decide whether a credit card can be given to a customer or not.
For this purpose, different types of ID and address proofs are also required. Typically customers would have to submit copies of one or more of the following:
- Passports
- Bank statements of last 3-6 months
- ITR statements for the last 3 years
- Aadhar Cards
- Driving Licenses
Always Check Fees
Remember that banks will try smart methods to sell cards to customers. Sometimes information such as Annual Fees is given in the fine print, often so tiny that a large percentage of customers miss it.
Also, a lot of companies in India give interest on a monthly basis, which becomes a lot higher year by year.
Make sure these parameters are noted before getting the card.
The bottom line here is to stay away from fraudulent agencies and get credit cards approved only by authorized.
These days a lot of bank applications are being filled by agencies that often make calls on unsuspecting customers to get personal information.
Data theft is a common problem in today’s digital era and customers must always verify callers.
Despite this, information such as PIN numbers must never be given out at any cost.
Use Carefully For Maximum Benefits
Just like a lot of other items, credit cards are also like double-edged swords. If not used carefully, they can invariably lead to spiraling bills at the end of every month.
One of the ways to keep it under control is to make all payments in a particular month by credit card and then to pay it off with cash in the next month.
People who run out of cash tend to use credit cards and end up using both cash and credit throughout the month.
There are often benefits in terms of cashback over multiple items such as groceries, restaurants, fuel, and others.
Such benefits can be used to save money in the long run when the credit card is used properly.
Different Types of Credit Cards
Each financial institution has a large repertoire of credit cards, with each one ideally suited for a few purposes.
Individuals can choose the card they want based on desired credit limits, reward points, and more.
Cards are meant to fulfill different lifestyle and aspiration needs of customers.
Self Employed Vs. Salaried Individuals
Banks generally set higher standards of credit approval for businessmen when compared to salaried persons.
This is because businessmen are largely susceptible to fluctuating incomes while salaried individuals are not.
It allows banks to accommodate higher risks in the case of the self-employed class.
For self-employed individuals, criteria such as prior ownership of a credit card, vehicle ownership, and a business of credibility are other factors that are often taken into consideration.
The minimum age necessary to own a credit card is 18 years, and some financial companies do set an upper limit of 65-70 years.
However, no parameter is as important for a credit card as is credit history.
About the CIBIL Score
In India, credit history is accessed through the CIBIL (Credit Information Bureau India Ltd) report.
This is the name of the primary agency that is responsible for giving information about credit reports.
The credit card information and other financial data are sourced from top banks and financial institutions in the country.
The CIBIL score is a three-digit number that falls between 300 and 900 and helps to determine any individual’s creditworthiness.
If an individual has a high credit score, it means that he or she has sound creditworthiness and is capable of paying back on time.
The CIBIL score is created as a numeric credit history summary on the basis of different factors.
Apply Online
There is no need to form a queue at any bank or other financial institution to get a credit card.
Instead, it is possible to apply for the same online on various websites. The application and approval processes have been greatly simplified over the years. Even the proofs for the card can be submitted online.
As long as it is used correctly, it minimizes the carrying of cash, making individuals feel a lot safer than usual.
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Category: Credit Cards
