What is a credit card? Application, advantages, disadvantages

What is a credit card, application, advantages, disadvantages What is a credit card, application, advantages, disadvantages

A credit card is a plastic metro card issued by a financial institution. Allows you to borrow money from a pre-approved limit to pay for your purchases, a limit set by the card-issuing bank, usually based on the bank’s Civix score and a good history. There is the limit, the main difference between a credit card and a debit card is also that when you swipe the credit card, the back is directly deducted from your bank account, and on making purchases with a credit card, it is deducted from your pre-approved limit.

What are the types of credit cards

Credit Cards Credit cards are available to suit various needs from travel to shopping and custom. Some examples of credit cards are fuel credit cards, cash back credit cards, secured credit cards, co-branded credit cards.

Types of Credit Cards in India

With Travel Credit Card, you can avail of discounts on Airplane, buses, Rail Tickets, Taxi Bookings.

fuel credit card

rewards credit card

Why should I have a credit card?

In addition to being easy to use, having a credit card is essential for the following reasons:

Helps in building a good credit score Get a credit-free period of up to 45 days Easy transactions both online and offline
Comes with attractive rewards, cashback, discounts, offers, etc. Comes
in handy in emergency situations.

With its help, you can make big purchases and pay later through EMI All transactions are secure as they require OTP and PIN verification

benefits of credit card

People who have a credit card can enjoy the following benefits-

Welcome Offer: Most of banks/credit institutions offer various types of welcome benefits to the cardholder. These gifts can be received in the form of vouchers, discounts or bonus reward points.

Reward Points and Cashback: Every time you shop with your credit card, you get some reward points or cashback in your account. Reward points can be used to get free gifts and deduct any other item while the cashback goes directly to your card account. If you have a travel credit card, you can earn Air Miles instead of Reward Points which can be used for booking flight tickets.

Fuel Surcharge Waiver: These days this discount can be availed on almost all types of credit cards. Whenever you refuel your vehicle, you get a discount provided you spend a certain amount.

Airport lounge access: Some credit cards offer lounge accommodations at domestic airports as well as international airports one or more times a year. Travel-centric credit cards and premium credit cards exclusively offer these.

Insurance: Credit cards also offer insurance and a fixed cover amount in case of an accident. It can be air accident coverage, card loss cover or foreign hospitalization cover.

Cash Advance – You can withdraw cash directly from ATM using your credit card. It proves to be very beneficial in case of emergency when you need cash immediately.

Add-on card – Many credit cards allow you to have an add-on card (known as a supplementary card) that you can share with your family members including your spouse, siblings, children, and parents. members can take. Add-on credit cards generally offer the same benefits as a primary card.

EMI Convert – EMI conversion is the most common benefit available on a credit card. You can convert your large purchases into EMIs and make payments over a period of a few months.

Credit card eligibility conditions

The eligibility for a credit card depends on several factors. Just as banks set their own eligibility criteria, different credit cards are issued by the same institution for different eligibility criteria. While basic terms such as age, city of residence, income source, credit score may remain the same for all credit card applicants, the biggest difference may be in the applicant’s income, which is the minimum income required to be eligible for a credit card. Based on the type of card, its benefits, and its annual fee, banks have prescribed income eligibility criteria for each card.

Documents required for credit card application

Documents for credit cards vary from bank to bank, some important documents required to apply are as follows:

Identity Card and Signature Proof- Passport, PAN Card, Driving License, Voter ID, Aadhar Card, Employee ID Card, and Employee Identity Card in case of Government employees.

Residence Proof- Bank statement, rent agreement, voter ID, ration card, passport, driving license, telephone/electricity/water/credit card bill, or property tax.

Age Proof- Voter ID, Secondary School Certificate (Class 10), Birth Certificate, Passport, Aadhar Card, Pension Payment Order, or Proof of Receipt of LIC Policy.
Income Proof for Salaried Person: Recent 3 Months Salary Slip, Salary Bank Account Statement for 6 Months.

Proof of Income for Self-Employed Businessmen/Professionals: Recent Income Tax Return and other attested financial documents with proof of business continuity.

Note: If you have a pre-approved credit card offer from the issuer, you may not need to submit any documents, especially if you already have one with the credit card issuing bank/credit institution Have an existing banking relationship.

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