• A list of hands-on dos and don’ts to make your first credit card application process a breeze.

Applying for a new credit card? Here are quick tips to help you. In the first quarter of 2020, the number of credit cardholders in India grew from its closing figure of 52 million active cards in 2019 to 58 million. That corresponds to almost 1 million additional active cards every month! If you would like to be one among that million in the coming months, we have a list of tips to help you to ace your application and get your hands on your first credit card. The exciting world of credit might seem like a free-for-all because a lot of banks send out emails with “pre-approved card” in the subject line. However, even if one is offered a pre-approved card, there will still be a bevy of documentation and evaluation done by the bank to evaluate your credit card eligibility.

The lender, whether it is a bank or a non-banking finance corporation, needs to be sure that you will be able to pay your debts on a regular basis. The bank evaluates you based on several criteria, some of which are easy to meet and others that might take some amount of work. How can you increase your chances of getting your first credit card? Follow these simple tips:

Tip # 1 Conduct a self-check

Before you approach the bank, why not conduct a self-analysis to evaluate whether you are able to check all the boxes on their criteria list? That way you can make changes in areas that are within your control:

Age – Are you at least 21 years of age? You need to be between 21 years and 65 years to obtain a credit card. If you have started your first job but are waiting for your 21st birthday, you might need to wait for a few months before you can apply for your first credit card.

Location – You need to be residing in a location serviced by the bank or NBFC.

Credit score – For some truly amazing cards like the Bajaj Finserv RBL Bank SuperCard, a credit score of 750 or higher is necessary. The better the benefits; the higher the credit limit, the higher the credit score required, in most cases. You need to prove to the bank that they can trust you with all of that. For your first credit card, you might therefore need to opt for what is known as a prepaid credit card, so as to build a credit history.

Minimum income – be sure that you are earning a minimum of Rs 25,000 per month – this is the minimum income for credit card eligibility. Still, looking for a job? You’ll need to land one to prove to the bank that you will be able to pay your credit card bills.

Applying for a new credit card? Here are quick tips to help you

Tip # 2 Stop splurging for a while

If you are earning Rs 25,000 per month and spending the same amount, you do not look like a responsible spender to the bank. The bank checks your debt to income ratio or the amount you spend versus how much you earn. Cut back on spends to show a good debt to income ratio when you apply for your credit card.

It might also help to have some investments or anything that can be seen as a corpus that you may rely on to pay back your debts in the future.

Tip # 3 Opt for pre-approval

You are just starting out your credit history and most certainly do not want to begin with negative points. A pre-approval process is what one might refer to as a “soft” check of your credit card eligibility. The bank will get all the information necessary to evaluate whether you are likely to have the ability to settle your debts, but will do so in an informal way that does not leave behind a paper trail. In case of rejection at this stage, you will not lose any points on your credit score. Should you get rejected at this point, you can always fix the points of concern and apply at the same brand, or another if you prefer. Remember to always be honest in your credit card application, as the bank vets all your document proofs with a microscope.

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