Credit cards are the easiest form of lending for emergencies and also help with payments in international locations or websites. While getting a credit card is the easiest when you have a job, those that are self-employed or unemployed can also apply for one in India.
For salaried persons, it is fairly simple to get a credit card as they can easily submit documentary proof of steady income like salary slips, income tax returns, etc.
If you are a retired person, a homemaker, or a student, the process could be a little difficult but not impossible. There are some pointers to look at when you apply for one:
Sources of income
When it comes to any kind of credit facility, the banks are primarily concerned with your ability to repay the money you borrow. On this premise, if you have to show some sort of income flowing into your account and provide necessary proof on it.
For example, if you have made investments in mutual funds or stocks or fixed deposits that fetch monthly returns like dividend or interest, proof of that can be easily produced.
If you are self-employed or do freelance work, you can provide bank statements and income tax returns records to show your business or professional income.
You could also show proof of income from royalty, child support or alimony.
The idea here is to provide sufficient and proper proof on paper that you have the capacity to repay the credit card dues with your regular income. Under such circumstances, you could apply for a standard credit card.
Sufficient bank balance
Sometimes, you may not have a regular source of income but may have a sizeable bank balance, you could go for a secured credit card.
In the case of a secured credit card, the bank balance or a fixed deposit will act as a collateral for the amount you borrow. You may get a credit limit of up to 80-90 percent of the deposit size.
If you fail to repay the dues, the amount will be deducted from your fixed deposit.
This is probably an easier way to get a credit card than having to prove irregular income sources. The minimum FD size is generally Rs 25,000 but could vary based on your bank's rules.
Students and homemakers
Students over the age of 18, can apply for credit cards if they have some sort of investment or trust fund to qualify as assets. Both homemakers and students could opt for a credit card on a fixed deposit in their name or seek an "add-on" credit card from a family member.
For example, if the parent or spouse has a credit card, additional credit cards are issued on the primary card to children (above 18 years) or spouse or parents, however, the credit limit will have to be shared by all the members.
This means that the primary credit limit will not be increased and a single consolidated statement will be sent to the primary cardholder by the bank for dues. All rewards and charges are directed towards the primary credit cardholder. The credit score of the primary cardholder will also be affected accordingly.
You could get a person with a good credit score to act as a co-signor or guarantor for your credit card application. This means that the bank will hold them responsible for payments of dues if you fail to make them on time. The credit score of the guarantor is also impacted.
Visit the bank's branch
It is highly unlikely that your bank will allow you to apply for a credit card online if you do not have a salary account from a job. You will need to visit the branch with all the necessary documents to apply for one.