A credit card can be a boon for those looking for short-term financial assistance to manage their expenses. It is one of the best financial innovations in the history of the financial services industry. One can use a credit card to manage a wide range of expenses and pay for online and offline shopping. Moreover, using a credit card wisely can help you avail of great discounts and cashback offers. However, not everyone looking for a credit card can get one. The credit card approval process can be tricky as it involves a thorough evaluation of the borrower’s repayment capacity. Read on to learn more about how to get instant credit card approved.
How to Apply for a Credit Card?
The exact application process for a credit card might vary, depending on the credit card company you are opting for. Today, a majority of credit card issuers allow people to make applications online on their websites. Alternatively, you can visit the credit company’s branch offices and start your application. If you already have an account with the credit company, you can easily apply for a credit card through their mobile application or net banking system. Representatives of various credit card companies are also present at shopping malls, and you can apply there as well. However, it is essential to check the eligibility criteria before applying.
Documentation Requirements for Credit Cards
The documentation requirements for credit cards can differ based on multiple factors. It is contingent on the type of credit card you are applying for, card issuer, city, etc. Here are some key documents that you must have for credit card applications.
The first essential document required from the applicants in the credit card approval process is identity proof. All government ID proofs are valid, including Aadhaar card, Voter ID, Passport, Driving License, etc.
Local address proof is required to apply for a credit card. In addition, you can submit your Aadhaar card, Driving License, Rent Agreement, Utility Bills, etc., as address proof.
Income and Employment Details
Income and employment details play a crucial role in determining your credit card limit. It is required to assess the borrower’s repayment capacity. It includes documents like bank statements, salary slips, etc.
Also, don’t forget to read: What is a Good Credit Score to Get a Business Loan?
The Approval Process for Credit Card Applications
The credit card approval process takes a fair amount of time as the card issuer has to check the authenticity of the documents submitted. In addition to the documents submitted, the credit score history of applicants is also factored in to determine the risk associated with them. If the applicant is not deemed a high-risk individual, the application is processed for approval. Unfortunately, many a time, credit card applications are rejected. Here are some common grounds for the rejection of credit card applications.
- A poor credit score can lead to immediate rejection of credit card applications
- If the applicant’s income is lower than the minimum required income, applications will be rejected
- Too much outstanding debt on existing credit cards is also a common reason for the rejection of credit card applications
- Errors in the application for credit cards or incomplete form submission can lead to rejection
Tips to Get Your Credit Cards Approved Easily
Here are some practical tips to get your credit card applications approved easily.
Refrain from Submitting Multiple Applications
One of the biggest mistakes that you must avoid while getting a credit card is making multiple applications. You should never apply for a credit card with multiple card issuers. It is important to know that financial institutions conduct a hard-line credit enquiry before approving your credit cards. A hard-line examination reduces your credit score, and multiple enquires can have a compound effect.
Apply for Cards on the basis of Your Credit Score
Before submitting your credit card application, it is highly recommended to check your credit score. You should only consider applying for the credit cards that match your score. Checking the minimum credit score criteria is a great way to avoid rejections.
Keep a Tab on the Utilization Ratio
The credit utilisation ratio is yet another important component that most lenders consider for approving credit card applications. The credit utilization ratio is defined as the credit used divided by the total credit limit. This ratio should be under 30% for most credit card applications. For example, if you have an existing credit card with a credit limit of INR 1,00,000, you must not exceed over 30,000 in spendings each month.
Timely Repayment of Credit Bills
Repaying the credit bills on existing cards is a great way to improve your credit score. It also helps you avoid interest charges and late penalties. You can get the desired credit card with great benefits if you have a higher credit score.
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Getting a credit card today is easier than it was a decade ago. However, you must match the minimum criteria set by the card issuer. A higher credit score can help you get the best free credit card in India.
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