A credit card, is a card issued to customers of a particular bank, so that they can make the payment in any store for goods and services. This is also known as Payment Card. With the help of the Credit card, a user can purchase an item and later pay the amount to the card issuer. The bank sets a credit limit for the user depending upon the card type a user has chosen. The amount that has been spent with the help of the credit card should be repaid by the customer, to the card issuer or the bank. This credit card is different from debit card, since the debit required user to deposit amount in the account, for which the debit card has been issued. On the other hand, Credit card doesn’t require amount to be deposited prior to spending.
There are Different Types of Credit card. They are as Follows:
- Business Credit Card
- Secured Credit Card
- Prepaid Cards
- Digital Cards.
In this article, we are going to discuss about the step by step procedure for Applying and Getting a Credit Card.
Step by Step Procedure for Applying for a Credit Card:
- Step 1: Before applying for a credit card, a customer has to get a clear idea on the credit score. The card issuer checks for the individual’s credit score and makes the decision of providing a credit card. User has to maintain a good credit history in order to get a credit card. When you make the payments on time, avoiding two consecutive loans, etc., can increase your credit score. For each and every bank the Credit score limit may vary, however, it is important for you to maintain a positive credit score.
- Step 2: About 30% of your credit score depends on the amount you owe to the bank. If the credit limit is below 30%, then your credit card application will be approved easily. You should keep in mind to repay your debts on time, if you are willing to apply for a credit card.
- Step 3: Analyse and find a card, that fits your needs and will not be affected by your credit score. You have online tool for check the method. You should not go for the first offer you see, without analysing about the benefits.
- Step 4: When you apply for a credit card, make sure that you include all your incomes, so that you will be receiving a good credit score. Since the card issuer or bank checks for the debt-to-income ratio, before setting the credit limit, the more details you provide about income, the more credit you will receive. You have to make sure that, you have not provided any false information while mentioning your income. Since this is considered as an offense and is punishable if your card issuer finds out any false details.
- Step 5: Even if your application gets rejected in the first attempt, you should not give up and request the card issuer, since they reconsider your plea. Ask for the reasons for rejections and you have to check your credit score online and come up with a convincing argument, so that your credit card application is approved.
Nowadays, many banks are giving instant approval for credit cards for the account holders. However, the limit may vary depending upon the individual’s income. You can submit the credit card application in person in the branch, in which you hold the account or you can apply for the credit card online, as well. Even though, there are numerous advantages like convenience of customer, there are also hidden disadvantages while using a credit card.
Some of the Disadvantages are as Follows:
- High Interest Rate
- Losing control over Purchase
- At times, users find it Difficult to Repay their Debt.
Using credit card has its own advantages and disadvantages. Whatever the card maybe, user has to have a grip over his or her purchase of goods.