Here's All You Need to Know About How to Apply For a Credit Card

A credit card is a good way to boost your credit profile positively and is safer to use than cash or debit cards. Most credit cards also come with offers and benefits in the form of cashback, reward points, and discount offers. But it can become a hassle if you are searching for the right credit card as there are so many options available now. Almost all Indian financial institutions like banks, NBFCs, and credit cooperative societies offer various credit cards to their customers.

If you do not know how to apply for a credit card, this article is for you. Here we have discussed everything you need to know if you want to apply for a credit card.

Get your credit score

You can get your credit score report from one of the 4 major credit rating agencies in India - CIBIL, Equifax, CRIF High Mark, and Experian. The score obtained from these reports will form the basis for the approval or rejection of your credit card application. In India, the credit score ranges between 300 and 900. Below is a breakdown of the CIBIL credit score range in India:

Excellent: 750-900

Good: 650-749

Fair: 550-649

Poor: 300-549

If you do not have a credit score, implies you do not have a credit history. In such a scenario, you will have to look for a secured credit card offered in lieu of security, such as a fixed deposit. Having an excellent credit score puts you in a position where you can request the best reward points credit card and have a high chance of getting it approved.

Consider your needs and requirements

You have to consider your needs and requirements before applying for a credit card, such as whether you want to get travel rewards or cash back, or you just want to develop your credit score. Each card has its terms and conditions, such as service charges, annual fees, interest rates, offers, and benefits. Bajaj Finserv has a range of credit cards that can suit individual needs and requirements.

Compare credit cards

Different credit cards can be compared on a certain key metrics such as:

Annual Fee - Some card issues can charge an annual fee for using credit cards issued by them. Cards with an annual fee generally come with luxury perks such as travel lounge access and rewards. Additionally, some companies might waive off the first year's annual fee for new cardholders.

APR - APR (or Annual Percentage Rate) is the rate of interest applied to your credit amount for one billing cycle.

Cash Advance - The amount of your credit limit that can be withdrawn as cash from an ATM. Most cash advances from credit cards are subject to high transaction fees and APR.

Penalty - If your credit card bill is not paid on time, it is most likely subject to certain penalty fees. If you exceed the maximum card usage limit, a penalty can also be charged.

Check for pre-approved card offers

Before applying for a credit card, check if you have any pre-approved offers. However, do keep in mind that having a pre-approved credit card does not guarantee that you will get the card. Bajaj Finserv offers pre-approved credit cards for its customers, and they are relatively easy to apply for.

Be prepared for an impact on credit score when you apply

Whenever you apply for a credit card, it triggers a hard inquiry into your credit profile that causes a slight dip in your credit score for a short while. The maximum time that a hard inquiry stays on any credit report is 2 years. If your credit card application gets rejected, it is best to apply again after a minimum gap of 3 months.

Chalk out a repayment strategy

Credit card repayments have to be made on time; otherwise, they can pile up interest charges and late fees on you, in addition to damaging your credit score. Moreover, the interest charges on late payment of credit card dues are usually high. So it is best to pay your credit card bill in full and on time.

Final Thoughts

No matter how excited you are, if you are thinking about how to apply for a credit card, it is best to review your credit score and know whether or not you fulfill all the requisites for applying for your desired credit card. If you are looking to apply for a credit card, head to the official website of Bajaj Finserv, as they have a detailed checklist that will help you with the application for credit cards.