At times, you may require some additional funds than what you already have in the form of cash. To meet such requirements, different financial institutions provide you with the choice of borrowing funds from them through credit cards. Continue to read to know more about credit cards, their features, and their benefits.
What are credit cards?
A credit card basically is a financial instrument that permits you to borrow funds from the creditor to meet your required expenditures while endowing you with the luxury of repaying the borrowed amount later without charging any penalty if the repayment is within the due date. A credit card provides you with a credit line that can be utilized to make your necessary purchases or payments. However, this specific amount must be repaid by the due date as agreed mutually by the cardholder to the bank.
Credit card eligibility conditions
You can apply for the credit card only if you mitigate the listed eligibility criteria. Note that this eligibility criterion stands true for all creditors. ICICI Bank credit card eligibility too will be the same.
- You must be an Indian citizen with age equivalent to over 18 years.
- You must be either a self-employed or salaried individual.
- You hold a strong credit score of 750 and above.
Different financial institutions or banks go through your financial backgrounds to review your credit history. And based on this assessment, they decide your chances of availing of a credit card. Moreover, there are even different tools such as credit card eligibility checks to know if you are eligible for a specific credit card online in just a few minutes.
What are the crucial credit card documents required?
Besides the above-mentioned eligibility criteria for a credit card, you must have the listed credit card documents:
- Identity proof (PAN card, Passport, Aadhaar card or Voter’s ID)
- Income proof (Salary slip, Salary certificate, ITR statement, Employment letter etc.)
- Address proof (Electricity bill, Aadhaar card or Telephone bill)
Crucial credit card features
Here are a few of the crucial credit card features that you should be aware of:
- Credit cards come with a bank approved credit card limit. The credit card limit defines the amount the credit card holder can spend through the card.
- Credit amount must be repaid by the holder to the financial institution by the due date, which mostly is after thirty days of the transaction through the card.
- Credit card limit is determined by the financial institution based on your credit history and credit score.
- In appearance, a credit card is a rectangular, thin, plastic card that you can swipe to make a payment. Nowadays, credit cards may also have a metallic body.
- Every credit card comes with a grace period or interest-free period. It is the time within which you must repay your borrowed amount.
What are the benefits of credit cards?
Are you confused about purchasing a credit card? Listed here are some of the reasons that you must for sure go for:
- Credit card is an amazing way to form a strong credit history for yourself as well as expand your purchasing power.
- Credit cards usually offer enhanced payment flexibility.
- Holding a strong financial history may assist you in establishing a strong credit score and thus make you eligible to avail of benefits of various financial products.
- As you utilize credit cards daily, you collect reward points for each buy. Such points later can be liquidated while making the payment on travel or on other e-commerce podiums.
- In comparison to other payment modes, credit cards are looked upon as a secure way of making your financial transactions.
- If any need arises, you can choose to convert your purchases on the credit card into EMIs and repay them gradually with the billed amount.
What are the disadvantages of credit cards?
Here are listed some of the disadvantages of credit cards. These basically are reasons that you must consider thinking twice before availing a credit card:
- Credit card is issued by the creditor with the condition to repay the spent amount on time.
- If you fail to make the repayment on time, you must bear the penalties.
- Missing out on your due payments or maximizing your credit card limit might lower your credit score. A lower credit score pulls down your eligibility for future loans and credit cards. Thus, to keep your credit score on track, ensure to timely repay your dues on credit cards and loans. Also, ensure to conduct a credit score check periodically to see if all the data are correct. In case of any incorrect data or error, instantly report it to the concerned bureau or lender for quick correction.
Which credit card is correct for you?
Catering to the different needs of the individuals, there are different kinds of credit cards available with banks or financial institutions. Based upon your purpose, you can select from the below list of different kinds of credit cards:
For travel addicts: Travel credit cards are the ones that may meet all your travel requirements ranging from train or airline bookings to cabs and hotels. You can earn rewards or cashback on every buy that you make using the card for such bookings.
For transportation requirements: Fuel credit cards are prudent for lowering your transportation expenses. Such credit cards assist you in availing a waiver on fuel surcharge, which enables you to make considerable savings on fuel expenditures.
Additional discounts: Cashback or reward credit cards offer massive rewards on all spending. You can earn the bonus points on every buy and redeem them to get discounts on your future buys.
For shoppers: Credit cards specifically designed for shopping permits you to shop at different partnered stores, whether offline or online. This credit card provides you with different discounts in the form of discount vouchers, cashback and others.
For additional savings: Secured credit cards can simply be availed against FD (fixed deposit) and permit you to get the benefit of an attractive rate of interest along with an improved credit profile.