Last Updated on 29/12/2020 by Deepak Singla
A credit card is an easy way to spend without having cash in hand. Also known as digital money, this is a payment card issued by banks to cardholders. You can enjoy purchases and have the convenience of paying the actual money later.
A credit card usually has a pre-approved credit card limit set by the bank and you must pay back the balance within the due date. There are tons of credit cards available in the market. The Government, now, grants credit cards to farmers as well, called Kisan Credit Card. Choosing the Best Credit Card for all your needs from a plethora of options could be a difficult job.
This article will tell you all about credit cards, best credit cards in India to buy, and give you plenty of other information regarding the same.
What is a Credit Card?
Many people still find it hard to differentiate between credit card meaning and debit card meaning.
Credit card is a plastic payment option offered by banks that allow you to make the payment before and actually pay for it later. But with Debit card you can spend your saving bank account balance easily in form of digital payments.
The credit card issuer fixes a monthly credit limit and you can make purchases within that limit. Later, you will be required to make the payment along with an interest rate within a pre-set due date.
Types of Credit Cards Available in India
Basic Credit Cards
This is the preferred choice for all those who want to start using a credit card. You will receive a small credit limit as per your income and you will be able to make purchases. No additional benefits are offered.
Secured Credit Cards
If you have a poor credit history, then this is the best card for you. You need to make a deposit equal to your credit card limit. When you issue a credit card against a fixed deposit, then that becomes a secured credit card.
No Annual Fee Credit Cards
This card does not levy any annual fee for using the credit card. This is the basic credit card, or maybe slightly better than that with very few benefits.
Low-Interest Credit Cards
These are credit cards that offer a lower rate of interest when compared to other cards from a similar category. It is different from the balance credit card as the interest rate is not 0% and the rate is not valid for a specific time.
Balance Transfer Credit Cards
A balance transfer credit card has a low rate of interest for a certain time. If your current card has a higher interest rate, you could transfer the remaining balance to a balance credit card to enjoy a lower rate.
Rewards Credit Cards
This one offers rewards every time you spend with the card. The number of reward points you get for a specific type of transaction is determined by the bank.
Cashback Credit Cards
With these credit cards, you will receive a certain percentage of the purchase amount as cashback every time you make a transaction, like shopping and online bill payment, etc.
Travel Credit Cards
A travel credit card provides benefits like travel insurance, favorable currency conversion rates, and more. You will receive all these perks if you are a frequent traveler.
Shopping Credit Cards
Shopping Credit Cards provide deals and offers when you use them for shopping expenses. You will receive additional rewards for both online and offline shopping.
Entertainment Credit Cards
These provide you with discounts and offers on all sorts of entertainment-related expenditures.
Airmiles Credit Cards
Every time you spend with the air miles card, you will receive air mile points. When you have accumulated enough air miles points, you will be able to redeem those for free flight tickets. You could also receive other goodies available.
Lifestyle Credit Cards
This credit card provides you with perks when you use it for lifestyle expenses. Such expenditures include premiere screenings, nightlife, fashion shows, and more.
Premium Credit Cards
Premium credit cards can be bought by a few people. These provide access to free golf clubs, concierge service, insurance, and airport lounges. It also provides you with complimentary travel and hotel accommodation coupons. Not everyone has the right to own this card.
Co-Branded Credit Cards
These provide discounts and offers every time you make a transaction with the brand tied up with the bank. You can make other transactions as well. However, those wouldn’t be much profitable. This strategy is used to increase the number of customers for the brand.
Student Credit Cards
As the name suggests, student credit cards are meant for college students. This one does not have many criteria to be satisfied because students, often, won’t have a credit history. Besides, it has a lower interest rate since it’s for students.
Business Credit Cards
These are designed for business use only so that your business and personal expenditure doesn’t get intermixed. Also, you need to have a good credit history to be eligible for the card.
You need to load money into these before using them. Every time you make a transaction with this card, the amount is deducted from the card balance. One plus point is that you won’t have to pay any finance charge for this card.
Top 20 Best Credit Cards in India 2020
Here is the analytics comparison of 20 Best Credit Cards in India with there interest rate and Annual Fee and Joining fee.
|Sl. No.||Credit Card Name||Interest Rate||Joining Fee||Annual Fee|
|1.||HSBC Visa Platinum Card||3.30% per month||Nil||Nil|
|2.||Citi Cashback Card||3.25% per month||Nil||INR 500|
|3.||IndianOil Citi Platinum Card||3.25% per month||Nil||INR 1,000|
|4.||HDFC Freedom Credit Card||3.40% per month||Nil||INR 500|
|5.||Yatra SBI Credit Card||3.35% per month||INR 499||INR 499|
|6.||HDFC Bank Diners Club Black Card||3.25% per month||Nil||INR 10,000|
|7.||Induslnd Bank Platinum Card||3.83% per month||Nil||Nil|
|8.||Axis Bank Neo Credit Card||3.4% per month||INR 250||INR 250|
|9.||SimplySave SBI Card||3.35% per month||INR 499||INR 499|
|10.||BPCL SBI Card||3.35% per month||INR 499||INR 499|
|11.||American Express Membership Rewards Credit Card||3.50% per month||INR 1000||INR 4,500|
|12.||ICICI HPCL Coral Credit Card||3.40% per month||INR 199||INR 199|
|13.||HDFC Doctor’s Superia Credit Card||3.60% per month||As applicable||INR 1000|
|14.||HDFC Regalia Card||3.49% per month||INR 2500||INR 2500|
|15.||Citibank Citi Cashback Credit Card||2.5% per month||INR 500||INR 500|
|16.||Standard Chartered Manhattan Platinum Credit Card||3.49% per month||INR 999||INR 999|
|17.||RBL Bank Platinum Maxima Credit Card||3.5% per month||INR 2000||INR 2000|
|18.||Kotak PVR Gold Credit Card||3.50% per month||Nil||INR 499|
|19.||HDFC MoneyBack Credit Card||3.40% per month||INR 500||INR 500|
|20.||ICICI Bank Instant Platinum Credit Card||2.49% per month||Nil||Nil|
1. HSBC Visa Platinum Card
HSBC Visa Platinum Card is very popular with people because of its amazing rewards. Besides cashback and reward points, cardholders also enjoy discounts and other facilities. You will enjoy the following benefits with the HSBC Visa Platinum Card:
- During the initial 90 days, you can avail 10% cashback on all kinds of expenditure, given you make at least 9 transactions. Also, the minimum expenditure should be INR 10,000.
- You will earn 2 points on every INR 150 spent.
- Also, you will make EXTRA points with selected partners.
- You need to spend at least INR 4,00,000 every year and make 5x rewards on all your successive transactions.
- To avail movie vouchers, you need to spend at least INR 50,000 in a month.
- You will also receive a fuel surcharge waiver every time you pay for fuel with the card.
- You will be receiving discounts on dining too under the HSBC Dining Privileges.
2. Citi Cashback Card
With this card, you will be able to make some money while you spend with the card. You will also receive cashback and other benefits on your expenditure. The following are some of the benefits you’ll enjoy with this card:
- Contactless payments of up to INR 2,000.
- You just need to tap the card at the contactless terminal, no PIN is required.
- 5% cashback on movie tickets and phone bills.
- 5% cashback on utility bills, if paid via Citibank Online Bill Pay.
- 5% cashback on all other spendings.
- Exclusive dining and shopping benefits.
- 20% savings in participating restaurants.
- Purchases on EMI at over 2,000 mobile phones, electronics, and other retail outlets.
3. Indian Oil Citi Platinum Card
This is a fuel credit card that helps you save money on fuel and at the same time earn rewards. You will be able to enjoy several rewards on this card as well:
- An annual fee waiver on every INR 30,000 spent.
- You’ll earn 4 Turbo Points on every INR 150 you spend at IndianOil outlets.
- You’ll also enjoy a fuel surcharge waiver at IndianOil outlets.
- Earn 2 Turbo Points on every INR 150 spent at supermarkets and grocery stores.
- Earn 1 Turbo Points on every INR 150 spent on other purchases.
- Personal concierge services provided along with offers on dining, shopping, etc.
4. HDFC Freedom Credit Card
This card is a convenient way to shop and earn for that. You will receive the following benefits with this card:
Enjoy 5X reward points on everything you buy starting from grocery, dining, movie, railway, and taxi bookings.
- Your birthday will become 25X better with 25X reward points on your birthday expenses.
- 10X reward points on purchases at SmartBUY and PayZapp.
- Receive a gift voucher worth INR 1,000 on your yearly expenses of INR 90,000.
- Get your renewal fee waived off if you spend INR 50,000+ every year.
- Also, enjoy an interest-free period of up to 50 days.
- Receive 500 reward points as your welcome benefit.
- A renewal bonus of 500 points when you pay the renewal fee.
5. Yatra SBI Credit Card
The Yatra SBI Credit Card is a joint venture of the State Bank of India (SBI) and Yatra. This is one of the best travel credit cards in India as of now.
In addition to providing offers on your domestic and international travel, this card brings you multiple benefits as well. Given below are some of the same:
- Vouchers of INR 8,250 from Yatra as a welcome gift. Also, you need to avail of the card within 30 days to receive INR 100 cashback.
- If you spend up to INR 1 lakh in a year, your annual fee will be waived from the second year.
- You will receive 6x reward points on money spent with the card on Yatra, grocery stores, and departmental stores as well.
- 6x bonus points on the base fare bus rates upon booking via Yatra.
- 1 point on every INR 100 spent on other retail stores.
- Points can be redeemed for Yatra vouchers.
- On every INR 30,000 spent at Yatra, you will receive a discount voucher for INR 500.
- You will also get access to airport lounges in India.
- Enjoy a 1% surcharge waiver on INR 500 to INR 3,000 spent on fuel.
6. HDFC Bank Diners Club Black Card
This is one of the most popular premium cards we have in India. Besides reward points, it also provides you with the best protection, golf benefits, travel benefits, lifestyle benefits, and more.
There are several benefits you can avail from this card:
- You will earn reward points on domestic and international air tickets and hotel bookings.
- You will also be able to redeem points for Airmiles or to book air tickets or hotels.
- You will also get access to more than 25 airport lounges in India.
- 24×7 concierge service as well.
- 5 reward points on every INR 150 spent at retail merchant stores.
- 10 reward points on every INR 150 spent on HDFC Bank Diners Club
- Complimentary golf games
- INR 2 crore worth cover for Air Accidents, INR 50 lakh cover for Emergency Medical Expenses, INR 9 lakh Credit Liability cover, and up to INR 55,000 of Travel Insurance Cover in case of baggage loss/delay.
7. IndusInd Bank Platinum Card
This is a premium card that will allow you to live luxuriously. You will receive several lifestyles and dining benefits with this card. The benefits of the IndusInd platinum card are as follows:
- 5 reward points on every INR 150 spent with this card
- Discounts on movie tickets
- Benefits under the Travel Plus Program
- Free Air accident cover up to INR 0.25 lakhs.
- Avail services during an emergency through the 24×7 Auto Assist Facility
- Get complimentary Priority Pass and access to airport lounges in India and abroad.
8. Axis Bank Neo Credit Card
This is the best card for all the moviegoers out there. You will be able to enjoy some of the best dining, shopping, and entertainment benefits with this card. The benefits of this card are listed below:
- Earn 2 EDGE Loyalty Rewards points for every INR 200 spent with this card
- 10% cashback on mobile recharge, movie tickets, and online shopping.
- Vouchers of INR 200 from Bookmyshow
- Convert transactions of INR 2,500 and above into EMI
- Avail 10% discount on all transactions of at least INR 500 on Myntra
- Zero lost card liability
- The card is protected with an EMV certified chip
- No annual fee need to be paid for the first year
9. Kotak PVR Gold Credit Card
The Kotak PVR gold card has been designed specifically for moviegoers. It is brought by a joint venture of Kotak Mahindra Bank and PVR Cinemas. The benefits of the card are given below:
- Avail 1 free PVR movie ticket on a minimum spend of INR 10,000 every billing cycle or 2 for INR 15000 expenditure.
- INR 75,000 worth of insurance for a stolen or lost card.
- Add-on cards for family members.
5 Best Credit Cards for Travel
Here is the list of Best Travel Credit cards in India with the comparison of an annual fee and Interest rate
|Credit Card Name||Annual Fee||Interest Rate (per month)|
|American Express Platinum Travel Credit Card||INR 5,000||–|
|Citi PremierMiles Credit Card||INR 3,000||3.10%|
|Air India SBI Signature Credit Card||INR 4,999||3.35%|
|SBI Card ELITE||INR 3,000||2.5%|
|Standard Chartered Emirates World Credit Card||INR 4,999||3.10%|
5 Best Low Annual Fee Credit Cards
Here are Best Low Anual Fee Credit cards in India with the comparison of an annual fee and Interest rate
|Credit Card Name||Annual Fee||Interest Rate (per month)|
|HSBC Visa Platinum Card||Nil||3.3% per month|
|IndusInd Bank Platinum Card||Nil||3.83% per month|
|SBI Card Unnati||Nil (For the 1st four years)||2.50% per month|
|YES Prosperity Edge||Nil (Limited-time offer)||2.50% per month|
|Axis Insta Easy Credit Card||Nil||2.50% per month|
5 Best Credit Cards for Fuel
Here is the list of Best Fuel Credit cards in India with the comparison of an annual fee and Interest rate
|Credit Card Name||Annual Fee||Interest Rate (per month)|
|IndianOil Citibank Platinum Credit Card||INR 199||3.25%|
|BPCL SBI Card||INR 499||3.35%|
|Standard Chartered Super Value Titanium Credit Card||INR 750||3.49%|
|IndianOil HDFC Credit Card||INR 500||N/A|
|ICICI HPCL Coral Credit Card||INR 199||3.40%|
5 Best Premium Credit Cards
Here is the list of Best Premium Credit cards in India with the comparison of an annual fee and Interest rate
|Credit Card Name||Annual Fee||Interest Rate (per month)|
|SBI Elite Credit Card||2.5%||INR 4,999|
|SBI Prime Credit Card||N/A||INR 2,999|
|AMEX MRCC Credit Card||1.15%||INR 1000|
|SCB Ultimate Credit Card||7%||INR 5000|
|Yes Premia Credit Card||3.5%||INR 1500|
5 Best Entry-Level Credit Cards
Here are Best Entry Level Credit cards in India with the comparison of an annual fee and Interest rate
|Credit Card Name||Annual Fee||Interest Rate (per month)|
|HDFC Money Back (Beginners)||3.40% per month||INR 500|
|ICICI Platinum Chip (Beginners)||3.40% per month||INR 199|
|SBI Simply Save||3.40% per month||INR 499|
|SBI Simply Click||3.40% per month||INR 499|
|CITI Cash Back||3.40% per month||INR 500|
You May like to Read: Everything you need to know about PNB credit cards
5 Best Lifestyle Credit Cards
Here is the list of Best Lifestyle Credit cards in India with the comparison of an annual fee and Interest rate
|Credit Card Name||Interest Rate (per month)||Annual Fee|
|Kotak Bank PVR Platinum Credit Card||3.50% per month||Nil|
|HDFC Regalia First Credit Card||3.49% per month||INR 1000|
|Axis Bank Privilege Credit Card||3.40% per month||INR 1500|
|JetPrivilege HDFC Bank Diners Club Credit Card||1.99% per month||INR 10,000|
|HDFC Diners Club Black Credit Card||N/A||INR 10,000|
5 Best Airline Credit Cards
Here is the list of Best Airline Credit cards in India with the comparison of an annual fee and Interest rate
|Credit Card Name||Interest Rate (per month)||Annual Fee|
|Air India SBI Signature Credit Card||3.35%||INR 4,999|
|RBL Bank World Safari Credit Card||3.40%||INR 3,000|
|Citi PremierMiles Credit Card||3.10%||INR 3,000|
|Axis Vistara Signature Credit Card||2.95%||INR 3,000|
|HDFC Diners ClubMiles Credit Card||3.49%||INR 1,000|
5 Best Super Premium Credit Cards
Here are the Best Super Premium Credit cards in India with the comparison of an annual fee and Interest rate
|Card Name||Reward Rate||Annual Fee|
|HDFC Bank Diners Club Black Credit Card||3.3% to 33%||INR 5000|
|HDFC Bank Infinia Credit Card||3.3% to 16.5%||INR 10,000|
|Citi Bank Prestige Credit Card||2% to 10%||INR 20,000|
|Yes Bank Exclusive Credit Card||2.5%||N/A|
|Amex Platinum Charge Card||1%||INR 60,000|
How to Choose the Best Credit Card?
The following points will throw some light on how to choose the best credit card as per your needs:
- Decide the purpose of the card because you can’t just go and buy a credit card without any reason.
- Determine if you will be carrying a balance.
- Look at your spending habits.
- Consider the type of rewards that suit you the most.
- Determine the type of credit card that is right for you.
Advantages of Credit Cards
If you use credit cards responsibly, then these could be great tools for earning rewards, handling unplanned expenses, and building credit.
A credit card has several benefits and advantages over a debit card. Some of them include:
Spreading out your purchases: A credit card will be able to spread out the cost of a big purchase over several months.
- Pay Later: Credit cards are convenient shopping options for many. This is mainly because you can buy a product or service now and pay for it at the end of the month.
- Benefits and Rewards: Almost all credit cards come packed with a bunch of rewards and benefits. You also earn rewards on every purchase. The cashback and incentives can be very useful later on.
- Cutting down your debt: A balance transfer credit card will allow you to transfer your existing debts to just a single credit account. Usually, this account has a lower or no interest rate. This way, you will be able to pay off your debts a lot quicker.
- Boosts your credit rating: The credit builder credit cards can improve your financial situations in ways unknown. If you constantly pay off the balance, then your credit score will rebuild slowly.
You can find more info: Reasons Why Applying for a Credit Card is a Good Idea
Disadvantages of Credit Cards
There are certain drawbacks to using a credit card as well. These include the following:
- Debt: If you cannot pay back what you borrowed, then you’ll push yourself into an abyss of rising debt. The credit cards that charge high-interest rates can keep building up if you miss the credit card bill payments.
- Credit Score: If you let your credit card debt build up or miss online credit card payment due dates, then your credit rating can quickly drop. The lower your credit rating gets, the harder it is to apply for credit in the future.
- Fees: Credit cards come with several charges. So, you need to cautious with how to use them.
- Limited Usability: You might be restricted in how and where to use your credit card.
You May like to Read Top 10 Best Personal Finance Apps in India for Financial Freedom
Difference between Credit Card and Debit Card
|Sl. No.||Feature||Debit Card||Credit Card|
|1.||Definition||A debit card is a plastic payment method that can be used for making purchases. Here the money is spent from the cardholder’s bank account.||A credit is a plastic payment option that you can use to make purchases. You have to pay what you spent later within the due date.|
|2.||Issuer||A debit card is usually linked to your Savings or Current Account. So, having a bank account is necessary.||You can get a credit card from anywhere without opening an account.|
|3.||Source of funds||Debit card transaction makes use of the funds available in your current or savings account.||When you make purchases using credit cards, the payment is made by the card issuer. Later, you will have to repay the amount to the credit card issuer.|
|4.||Access to funds||With a debit card, you are allowed to access only the amount available in your current and savings account.||On the other hand, credit card holders can access an amount up to their pre-approved credit limit.|
|5.||Interest||You don’t need to pay any interest here because the funds are debited on a real-time basis.||If you make any delay in the payments, then you will have to pay penal interest.|
|6.||Repayment||There is no repayment required in case of a debit card, so there is no need to repay.||In case of a credit card, you need to repay the outstanding amount.|
|7.||Charges||For using your debit card, you need to pay an annual maintenance fee in addition to a joining fee.||You’ll have to pay these credit card charges along with late payment fees, prepayment penalty, and foreclosure as well, in case of credit cards.|
|8.||Monthly statement||Monthly statements are not generated for a debit card because you can check all the debit in the account statement.||A monthly statement is provided if you have a credit card.|
|9.||Fees||Annual fees and PIN regeneration fees are applicable.||A lot of fees are applicable on a credit card like late payment fees, annual fees, and joining fees.|
|10.||Privileges||Debit cards generally don’t come with many privileges.||Credit cards offer several privileges.|
|11.||Lost card liability||If you lose or misplace your debit card, then the bank is not liable.||100% liability protection is provided on credit cards.|
|12.||Credit period||Debit cards do not have any credit period.||Credit cards do have a credit period.|
Credit Card Fee and Charges
- Joining Fee: This is the amount you need to pay while getting a credit card.
- Annual Fee: This is the amount you need to pay every year to keep your credit card in the active state.
- Duplicate Statement Fee: This is a fixed charge applicable if you want a duplicate statement in physical form.
- Late Payment Charge: The amount is a penalty to be paid over and above the interest charges applicable. It is payable if you do not make timely payments.
- Cash Withdrawal Charges: The cash withdrawal interest is the amount charged if the cardholder uses the card to withdraw cash.
- Over-limit fee: The over-limit fee is charged when the cardholders’ fees or purchases exceed the given credit limit.
What Do You Need To Know Before Applying For a Credit Card?
1. Secured or Unsecured
A secured credit card requires you to put collateral against it. On the other hand, an unsecured credit card does not require any. The credit issued under the secured credit card has a lower interest rate. The unsecured credit card has a higher interest rate as compared to the secured one.
So, decide properly as per your financial requirements before choosing one.
2. Interest-free period
Almost every credit card provides you with an interest-free period. This is the period that lasts from the transaction date to the payment due date. If you pay off the amount you used on the card within this period, then, you won’t have to pay any extra charge to the bank.
Once the due date is crossed, you will have to pay the applicable interest fee that is usually quite high. It is recommended that you pay off the entire amount regularly to avoid extra fees.
3. Interest Rate
The interest rates of most credit cards are generally higher than loans. You could get a fixed or a variable interest rate based on the type of card.
The credit cards go by the daily compounding rate of interest as per the Annual Percentage Rate (APR). There is a bunch of triggers that can trigger the APR and in turn affect the interest rate calculation of the credit card.
4. Minimum Payment
You will be needed to either clear out the minimum payment or the full amount as per the agreement of the credit card. You will always have the option of paying more than the required minimum payment.
Now, the minimum payment’s calculation can vary from one credit card issuer to another. It is calculated based on a certain percentage of your present balance or the interest plus a percentage of the principal.
So, pay close attention to the details of how the card issuer shall be calculating the minimum payment.
This is one of the most important aspects of a credit card agreement. Fees are the extra amount that will tell you how much you need to pay to keep the card running. These charges are in addition to the interest paid on the credit card.
Such credit card charges are also applicable if you fail to make a payment on time and other scenarios. Some of these fees include the annual fee, late payment fee, over the limit fee, etc.
You need to compare the amount charged by various card issuers under these heads and make a suitable choice for yourself.
6. Credit Limit
This is the maximum amount a credit card allows you to borrow. The credit card issuer will set a credit limit based on your qualifications and eligibility criteria.
If at any point in time, you surpass the limit or even reach close to it, then your credit score will be affected. So, this is a key point to look out for as well.
Credit cards come with a lot of reward points and benefits. Accumulating these rewards can prove to be beneficial later on. You will be able to make certain payments with these and even go on vacation. So, the perks offered by various credit cards could also form a decision making factor.
How to Apply for Credit Cards?
1. Credit Card Online Apply
The given steps will guide you through the entire credit card application procedure:
- Go to the website of the bank where you want to apply for a credit card.
- You need to fill out some basic details such as name, email ID, contact number, address, income, etc.
- Then, you will receive a call from a bank representative. They will guide you through the entire procedure.
- The representative will also come to your doorstep to collect your documents.
2. Credit Card Offline Apply
- Visit the bank branch and let them know about the type of credit card you need.
- A bank representative will elaborate on the cards to you.
- Then, you will be needed to fill in an application form along with KYC documents like identity proof, address proof, etc.
- You will also be needed to provide your income proof along with two passport-sized photos.
Eligibility Criteria to Apply for Credit Cards
The credit card eligibility criteria could vary from one provider to another. However, some of the general criteria are as follows:
- Your age should be at least 18 years old or more.
- You need to have a regular source of income to pay back the credit card bills.
- A decent credit score is preferred (700 or above).
Documents Needed to Apply for Credit Cards
The documents required to apply for credit cards could also vary from one card issuer to another. Some of the general documents asked for by most of the issuers are as follows:
- ID Proof: Passport, PAN card, Aadhaar card, employee identity card, Driving License, and more.
- Address Proof: Bank statement, rent agreement, Voter ID card, ration card, passport, driving license, etc.
- Age Proof: Voter ID, Birth Certificate, passport, Aadhaar Card, Pension payment order, etc.
- Income Proof (For Salaried Individuals): Last 3 months’ salary slips, last 6 months’ salary account bank statement.
- Income Proof (for Self-employed businessman/ professionals): Latest IT returns along with the computation of income, other certified financial documents, and proof of business continuity.
What are the Credit Card Rejection Reasons?
Several reasons could lead to denial of your credit card application. These are as follows:
- Low credit score
- Unstable employment
- Insufficient income
- Employment in a delisted private organization
- Not falling into the given age limit
- The residing address is present in the defaulter’s list.
Now, let us talk about these in details:
1. Eligibility Criteria
The credit card eligibility criteria vary from one provider to another. These are based on your salary, your workplace, etc. If an applicant does not satisfy such criteria, then their credit card application might stand rejected.
2. Low Credit Score
This is one of the major reasons for credit card rejection. If a bank finds that your credit score doesn’t meet their minimal requirement, then they will not trust you with repayment.
The credit score is calculated based on whether you pay back your credits regularly or not. If the credit score is not up to the mark or too low, then the credit card application will stand rejected.
3. Frequent Job Changes
If you are someone who changes their jobs frequently, then the bank assumes the applicant to be unreliable. For example, if someone switches their jobs within 6 months or 1 year, then the bank might reject their credit card application.
4. Insufficient Income
If your income is not at par with the salary criteria given by the credit card issuer, then your credit card application might stand rejected.
How to Avoid Credit Card Application Rejection?
1. Eligibility Criteria
A lot of credit card providers have a list of eligibility criteria for applications. These could include income specifications, age, specified range of credit score, etc. Make sure you fulfill such criteria to be eligible for the application.
2. Credit Score
Low credit scores are a chief reason for rejection. So, you need to make sure that all your loans and previous credits are paid off in time. This increases your credit score and your chances of approval.
3. Choose the Right Card
There are different types of cards available in the current market. Some of the cards are designed for beginners only. Try applying for a card that fits your financial status.
4. Credit History
Build your credit history in a good manner. You need to maintain a good relationship with your bank to do so.
You could also consider opening a Savings deposit account with the bank in question. This is because your chances of approval are higher if you are a long-time valued client.
5. Wait before re-applying
If you were rejected earlier, then wait for 3 months before re-applying. Otherwise, the credit card issuer will question your intentions.
FAQs Credit Cards
Q1. Do all credit cards have an annual and a joining fee?
Ans: No, all cards do not carry an annual fee and a joining fee. The basic credit cards don’t have an annual fee associated. But, the cards that do have an annual fee often provide a lot of perks and rewards.
Q2. Can I withdraw cash using my credit card?
Ans: Yes, you can withdraw cash at any ATM using your credit card. You have the allowance to withdraw from your total credit card limit as cash from an ATM. Keep in mind that these cash withdrawals will burden you with additional credit card charges and a higher rate of interest too.
Q3. How to earn credit card reward points?
Ans: You will earn some reward points every time you use your credit card. Some credit cards have partners as well, and you’ll earn higher reward points when you shop from them.
Q4. How to use my credit card reward points?
Ans: You can redeem your accumulated reward points as gift vouchers, movie tickets, discounts, merchandise, etc. The reward points offered to differ from one provider to another. It also depends on your usage of the card.
Q5. Can I increase my credit limit?
Ans: Yes, credit card limits get the revised time and again by the card provider. The previous credit card payment track record is taken into account, and your new limit is decided accordingly. In the same way, your limit might decrease due to several missed payments.
Q6. Do credit cards charge an interest rate for non-payment?
Ans: Yes, they do charge higher interest upon non-payment. The interest rate is generally applicable to the balance you owe on the card.
Q7. What is meant by a secured credit card?
Ans: A secured credit card is a type of credit card issued against security such as a Fixed Deposit. This is ideal for people who are not eligible for normal or unsecured credit cards.
Q8. What is meant by a lost card liability cover?
Ans: A lost card liability cover refers to zero liability benefit which is provided on almost all the cards. Here, the cardholder is not liable to pay any amount against the expenses incurred during the period between card loss and informing the same to the bank.
Q9. Do credit cards come with specific cash withdrawal limits?
Ans: Yes, credit card withdrawals do have a limit. This limit is pre-set and will be informed to you when your credit card gets approved.
Q10. What is meant by credit card balance transfer?
Ans: A lot of credit cards offer the option of transferring outstanding balances on other credit cards. They also offer debt consolidation to pay back EMIs. Besides, the introductory offers often encourage cardholders to transfer balances from other cards.
There are endless varieties of credit cards available to suit all types of needs. These offer several rewards, offers, discounts, cashback, and so on. Credit cards can appear very luring but these come with several charges as well that you need to be wary of.
We hope this article serves to the best of your interest and clears out all your doubts about credit cards.