Credit cards have become one of the best cash alternatives to cash in the modern era. They do not only offer ease of use and repayment but also help to improve your credit score. However, once you have selected your credit card, the next important thing that comes into play is the application process. The application process is very crucial, especially if you are applying for a new credit card.
1. Figure out your requirement: This is probably the most basic step and often the most overlooked one. Before applying for a credit card, you must know whether you want to use it for shopping, dining, fuel or other expenses. This would help you to avail maximum benefits from the card. For instance, if you’re a frequent traveller, a travel rewards card would be the best option for you. Similarly, if you prefer cash rewards on your purchases, a cash back card would be the most suitable option for youmay be preferable for you.
2. Do a thorough research of your options: Once you know about your preference, check out the options available that suit your specific requirements. Before finalising any selecting your card, consider the following key factors to make a wise decision:
• Rewards program: Discounts, cash back, freebies, etc.
• Joining/annual fees: Usually, zero is best, however premium cards come with several unique benefits.
• Complimentary features: Domestic and international lounge access, travel/accidental insurance, free movie tickets, etc.
In some cases, you get a waiver on annual and joining fees if you spend beyond a certain limit mentioned by your card issuer. You can do this research through online credit card eligibility tool provided by various leading fintech lenders. When you input the required details, such a tool lists all your options and you can choose the one which matches your requirements.
3. Check your credit report: Your credit score plays a vital role in determining whether your application would be accepted or rejected by the card issuer. Your credit score can range anywhere between 300 and 900. The closer your score is to 900, the more it reflects financial discipline and a good credit standing. . Moreover, an excellent credit score can help you qualify for low-interest loans and premium rewards credit cards. On the other hand, if you have a low or poor credit score, your loan application is likely to get rejected. You can check your credit score by requesting it from various credit bureaus operating in India. You can access your credit report through various online aggregators as well.
4. Complete the application and collate the documents: Once you have selected your card and you have an excellent credit score, the next step is to complete your credit card application. You can apply online as well as offline as per your convenience. The online system provides you with the option of applying for a credit card from the comfort of your home or office. At the time of submitting the online application, you are not required to provide documents. However, you will have to collate relevant documents and submit them to the card issuer at a later date for verification and consideration of your application. The list of required documents is mentioned on in the application form. So, make sure you have all the required documents in hand for easy approval of your credit card application.
5. Complete the Verification Processes and understand the card user agreement: Once you submit your application, next comes the verification process which includes verification of documents, credit history check as well as physical verification of your residence/office address as well as the phone number. Your card is issued and sent out to your address only after you have successfully completed multiple rounds of verification. Once, you receive the card, make sure to go through your credit card agreement. If you have any query, don’t shy away from asking questions to your credit card issuer.
Additional Reading- Reasons Behind Credit Card Rejections
The steps described above are one of the best practices that you can follow when while planning to get a new credit card. This will help you make an informed decision and enjoy the multiple benefits of a credit card.