Looking to apply for a credit card and boost your purchasing power? Go for it, but before you do, make sure you can manage the card while enjoying all its perks. This means knowing about its:
- Fees
- Billing cycle
- Rewards program
- Offers
No matter whether you’re a first-timer or an old hat, it is best to proceed with caution, and these tips can hold you in good stead.
Personal Preferences
First things first, assess your spending habits. Remember, this forms the basis of choosing the right card. Wondering why? Every person spends money differently. Some spend more on online purchases while others on travel.
Similarly, for some upgrading gadgets is important while for others shopping from the brands they trust is vital. For all these needs and more, you can get a variety of cards like:
- Co-branded credit cards
- Travel credit cards
- Shopping credit cards
- Student credit cards
- Fuel credit cards
Secured Vs Unsecured Credit Cards
Before you apply for a credit card, keep in mind that you can choose between secured and unsecured cards. While secured cards require you to pledge collateral as security, unsecured ones don’t.
- Secured credit cards come with lower interest rates as compared to the unsecured cards
- In secured credit cards, there is a risk of loss or damage to the collateral
- The collateral is mostly a fixed deposit and that’s why secured cards are called FD-backed cards
- The fixed deposit amount will be the maximum credit limit of your secured card
- Opt for a secured card when you have a lower credit score or you don’t meet the issuer’s eligibility criteria
Interest Rate and Additional Charges
Credit card companies allow you to pay the minimum amount due on the bill or even a partial sum before the due date. This comes in handy when you’re unable to pay the entire bill.
But that’s not all. When you don’t clear the bill in full, you’ll have to pay additional interest on the outstanding amount. If this accumulates to a huge amount, repayment can be longer and difficult to handle.
A few other charges include:
- Joining fees
- Annual renewal charges
- Late payment fees
- Overlimit fees
- ATM cash withdrawal charges
- Foreign transaction fees
These charges may give you unexpected financial surprises if not checked beforehand. So, assess these charges well in advance before selecting a card.
Qualification Criteria and Paperwork Requirements
Before you apply for a credit card, meeting the eligibility criteria set by the issuer is crucial. You’ll have to submit certain documents to the issuer. Being aware of these parameters before finalising a credit card issuer can help you avoid rejections.
The eligibility criteria generally encompass parameters such as:
- Credit report and score
- Existing debt obligations
- Age and residence
- Income and employment
- Timeline of your existing credit
- Credit report inquiries
The documents generally include:
- Identification proof, such as your Aadhaar card, PAN card, driving licence, etc.
- Residence proof, such as your passport, utility bills, Aadhaar card, etc.
- Income and employment proof, such as your salary slips, latest bank statements, etc.
These parameters and documentation can vary from one issuer to another. Check these requirements properly before you zero in on an issuer.
Inclusive Perks and Benefits
While applying for a credit card, don’t forget to check the associated perks. Find a card that offers the best perks:
- Cashback on purchases
- EMI facility
- Welcome or joining rewards
- Discounts and deals on purchases
- Reward points on transactions
- Discounts on flight and hotel bookings
- Fuel surcharge waivers
- Free airport lounge access
- Waivers on annual renewal fees
- Complimentary insurance cover
Add-On Card Options
Nowadays, many credit cards come with the facility of add-on cards. Wondering how they work? It’s simple. They are supplementary cards issued against a primary credit card. Your spouse, kids or parents can use them effortlessly.
However, the primary cardholder will be responsible for paying the bill. If you plan to opt for this facility, check whether the card you select has this option.
Maximum Credit Limit
Another thing to pay attention to is the credit limit that the card provider will sanction. You can only make purchases within this approved credit limit. But don’t forget that this limit should be enough to meet your expenses while still allowing you to keep the credit utilisation ratio low.
Keeping this ratio on the lower side is essential to maintain good financial health and build a good credit score.
In addition to these points, check the credit card’s fine print to understand how it works. Once you’re aware of how the reward points system works, finalising the right option will be easy. Make sure you also know how to check credit card status to keep updated once you apply.
If you plan to get a card that lets you spend confidently while allowing you to earn exclusive perks, the One Credit Card is a great option. From getting to enjoy 5X rewards on top two spending categories to being able to convert your big-ticket purchases into affordable EMIs, managing this card via its powerful mobile application is simple and hassle free.
What’s more, you get to save more since you don’t need to pay any joining fee, annual fee, or reward points redemption charges. Apply now to get your hands on the credit card and experience seamless transactions.
