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Explain The Complete Process Of Applying For A Credit Card

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What does a Credit Card Mean?
In today's time, one doesn't like to carry along much cash with them due to various security concerns. Here, offering you convenience and safety, the best credit cards comes as the best option. A credit card is a form of plastic money. It is a plastic card that gives the buyer the authority to purchase goods by borrowing money from the banks as per their credit limit.

Types of credit card available in India


Characteristic of Credit Card
Features are different depending upon one credit card to another; still, there are some standard features applicable to all credit cards as listed below:
• Credit Limit
The maximum amount which the cardholder is allowed to borrow will be according to the permitted credit limit, which depends on the income earned and the past credit history of the applicant.
• Interest Rate
Overdue balance is charged with interest rates. The interest rate ranges from nil to 50%. Note that the late payment fee is charged in case the bill is unsettled.
• Time Limit
The credit period is of 20-50 days depending on the date of the bill. The bill amount has to be settled by that time in case if it's not a grace period of a few more days is granted after which interest is charged.
• Incentives
The credit card bearers are given incentives that depend on the type of credit card they hold. Parties that are involved in Credit Card Transactions:
• The Applicant/User: Holder of the card.
• Bank:
Credit card provider.
• Merchant: the individual or the company that accepts payments initiated by credit card for goods and services.
• Acquiring bank: The bank that carries out all transactions between the cardholder, merchant, and the issuer.
Advantages
The following are the benefits that one gets being a credit card user:
• A credit card provides Flexibility in payments.
• A credit card makes purchasing easier and shopping simpler as one can use it to do online shopping.
• Owning a Credit card gives you incentives like a concession on holiday plans, cash back on purchases, and also insurance cover.

There are also a few Disadvantages listed as follow:
• The interest rates are very high and subject to change.
• Merchants who accept credit cards need to pay a processing fee to the acquirer on transactions. Sometimes they pass the charges to the customer due to the agreement made between the parties.
• If the card is stolen, an additional charge is also imposed on the customer.


Types of credit card
Some popular credit card types are:
• Gold Credit Cards
• Silver Credit Cards
• Low-Interest Credit Cards
• Business Credit Cards
• Balance Transfer Credit Cards
• Cash Back Credit Cards
• Premium Credit Cards


How to know if you are eligible for a credit card?
Banks provide credit cards, and each bank offers different types of credit cards. The customer can choose the card as per their requirements. One to three years is the period the card is issued for.


How to apply for a credit card?

  1. Select the card that you want to apply for.
  2. A fully completed application form with a photograph along has to be submitted.
  3. For proof and verification, you need to provide the following identification documents:
    a) Proof of income
    b) Statement copy of bank (previous 6 months).
  4. The documents could be sent through an agent or could even courier to the given address. The company would cross check the details given by you.
  5. If all the details after verification are found right, you can get the credit card in 3 to 4
    weeks beginning from the day the application has been sent.
  6. A courier will receive the document. The card would only be handover to the applicant.
    The company will brief you about the card limit. It is mandatory for you to put your signature at the back of the card. In case the card is stolen or lost, it serves the purpose of authentication.

Reasons for Application Rejection
The following reasons contribute as factors that your application might get rejected can be
any of these:

Your insolvency to repay previous loans that you might have taken from the bank.
• Every bank sets minimum income criteria. In case if it is not fulfilled, the application might get rejected.
• If the applicant is not available for the verification process.


Credit Card Receiving Procedure
You can get your credit card without much hustle in 3 days through:
• Bank (in Person)
• E-mail
• Internet


What is the payment procedure?
Credit card payments can be done in 2 ways:

  1. Online payment
  2. In bank
    Banks offering Credit Cards
    Some of the popular banks offering credit cards are:
    • Citibank
    • HDFC Bank
    • ICICI Bank
    • Standard Chartered Bank
    • SBI
    It should be kept in mind that having a credit card is not the necessity of life, it is an only
    convenient mode of payment and the most important thing you need to do is to use them
    credit cards wisely.
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