From offering unmatched financial freedom to meeting financial emergencies, a credit card has become an essential instrument for most people. This small plastic card allows you to lead a lavish life without having to pay for it instantly. With advancements in technology, lenders are now facilitating online credit card applications, which implies you can apply for a credit card in a 100% online and paperless way.
Are you looking to get a credit card to manage your finances effectively? Well, with flexible eligibility norms and a stable income, anyone can apply for a credit card. So, let’s look at the general requirements you need to meet before filling out your credit card application form.
1. Minimum Age
To apply for a credit card, you must be between 18 and 60 years of age. However, many lenders have a minimum age criterion of 21 years for applicants applying for the first time. The minimum age requirement varies from lender to lender and also applies to add-on credit cardholders.
2. Annual Income
Financial institutions will assess your annual income to determine if you’re eligible for a credit card. The minimum income requirement differs from bank to bank and depends on the type of credit card you select and the features it offers. For a premium card, you should have a higher salary as compared to a basic card. You will have to submit relevant documents to prove your income.
Your nationality is another factor that determines your eligibility for a credit card. In most cases, only Indians and NRIs can apply for a credit card in India.
4. Credit Score
An excellent credit score shows the lender that you are responsible with your payments and have a good credit history. A good credit score lies in the range of 750 and 900. But a score below 700 can imply an unhealthy credit history and reduce your chances of getting approved.
5. Credit Utilization Ratio
This is an important factor that banks consider before approving your application. A Credit Utilization Ratio is the ratio of your total spending to the accessible credit limit. This simply means how much of your available credit are you using. The more you spend, the higher your utilization ratio will be. It is ideal to keep it below 30% to increase your eligibility for a credit card.
6. Multiple Existing Loans
When you have several existing loans, banks can be hesitant to approve your credit card request. They will not have confidence in your repayment capabilities, given the prevailing debt. Hence, this becomes an important factor to consider while determining your eligibility.
With attractive features and benefits, credit cards are becoming an increasingly popular credit instrument among the working class. From salaried employees to self-employed professionals, borrowers across a wide spectrum can apply for one.
There are several tools online that can help you with credit card comparison and identifying the one that best fits your lifestyle and requirements. But before moving forward, make sure you check the eligibility criteria and the required documentation with your lender as it can increase your chances of getting approved.