Why is CIBIL Score important to get a Credit Card?
CIBIL, or credit score, is an important factor for your credit card eligibility. Lenders, including credit card companies, rely on this score to assess your creditworthiness.
Minimum CIBIL Score Required for Credit Card
The minimum CIBIL score required for credit card approval may vary from lender to lender. Most credit card companies prefer a score of 750 and above. However, some lenders also provide secured credit cards to individuals with low scores.
10 Things to Keep in Mind Before Applying for a Credit Card
Getting a credit card is like entering into a new chapter of life where you need to be ready with milestones and adjustments. You might already know how a credit card works, but at the same time, it is necessary for you to know things in detail. Here are 10 things you must know:
1. Type of Credit Card
The first thing you need to keep in mind is to do thorough research about credit cards. There are a lot of credit cards available in the market, and you must select the one that suits your requirements best. If you are new to credit cards, you should use a beginner credit card with zero joining and annual fees.
2. Eligibility Criteria
The eligibility criteria may vary from lender to lender based on age, income, employment status and your credit history. It is important to check the eligibility criteria beforehand to avoid rejections.
3. Interest Rates
Interest rates are charged to you when the credit bill is not paid in full each month. This is the cost of borrowing money from the lender and is expressed as an annual percentage rate (APR).
4. Credit Limits
This limit is the maximum spending limit you will have on your credit card. It is important to choose a credit card with a credit limit that suits your spending needs.
5. Rewards and Benefits
One of the best things about credit cards is the rewards and benefits they offer. Most of the cards offer welcome bonuses, milestone benefits, reward points and discounts on selected merchandise. You can select the card that offers rewards and benefits that suit you the best.
6. Income
Your income plays an important role while applying for a card, as the issuer must check your ability to repay. The higher the income, the higher the credit limit.
7. Credit Card Terms and Conditions
It is important to understand the terms and conditions of the card issuer as it is an agreement you agreed up on while getting the card.
8. Fee and Charges
Make sure that you have checked all the fees and charges associated with the credit card. The important factors you must look for are the joining fees, annual fees, transfer fees, overlimit fees, foreign charges, etc., before you choose a credit card.
9. Grace Period
This is the time when the issuer refrains from charging any interest on your purchase if you make the entire payment before the payment due date.
10. Impact on Your Credit Score
Credit cards can impact your credit score. Using your card wisely will help you increase your credit score and vice versa.
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Frequently Asked Questions
The CIBIL score shows your creditworthiness, and it's vital for credit card approval.
While it's challenging to secure a credit card with a low score, some lenders offer secured credit cards or specialised cards for individuals with lower scores.
Checking your credit score annually is advisable. However, it's crucial to monitor it more frequently if you plan to apply for a credit card or other loans in the near future.
Yes, some lenders have them, but they may come with higher interest rates and lower spending limits.