What is a Credit Card?

A credit card is a financial instrument that has a pre-loaded balance that the cardholder can use to make transactions and pay for them later. The card issuer will let you pay off the balance fully, interest-free, for up to 50 days from the date of payment. To avoid any fines, the cardholder can pay the minimum amount due (which can be anywhere between 5% to 10% on the total amount owed). The balance, however, will be carried forward to the next month, and interest set by the credit card company will be levied.

Different Types of Credit Cards in India

• Shopping Credit Cards: Shopping credit cards are curated to reward cardholders for their shopping expenses. They offer ample rewards in the form of points or cashback, which can be redeemed for merchandise, travel, or other rewards.
• Lifestyle Credit Cards: LifeStyle credit cards fulfill your lifestyle wants and suit your various needs. Get reward points for every swipe you make. Avail for shopping discounts and cashback on retail spends.
• Fuel Credit Cards: A Fuel Credit card is being offered by banks to customers in a bid to provide them with maximum benefits while purchasing fuel. Having this card enables those who constantly buy fuel for various purposes to lower their expenditure on fuel. Apart from that, it enables the users of Fuel Credit cards to use it for other benefits with regard to lifestyle.
• Rewards Credit Cards: Rewards credit cards offer you some type of "reward"—typically cash back, points, or travel miles—for every dollar you spend, sometimes up to certain limits. Depending on the card, you can then use your rewards in a variety of ways.
• Travel Credit Cards: Travel credit card is a type of credit card that offers exciting offers and deals related to travel. Most features and benefits offered by travel credit cards provide you savings on travel. From air ticket bookings to reward points accumulation, everything comes with a perk when done through travel credit card.

Features & Benefits of Credit Cards

• Credit Limit: Credit limit refers to the maximum amount you can use through your credit card at a given point of time. You are liable to be charged a fee on exceeding the given credit limit. Credit Limits may change from month to month based on purchase and payment habits.
• Balance: The balance on your credit card represents the total amount you owe. This includes purchases, finance charges, and fees. You may check your balance online, or by calling customer service.
• APR: APR refers to the term Annual Percentage Rate, an interest rate applicable to the balance you carry forward past the grace period
• Grace Period: Grace Period refers to the period of time you are allowed to repay your balance in full before being charged a fee. Typically, balance transfers and cash advances do not have grace periods.
• Credit Card Fees: The most common fees include annual fees, finance charges, late fees, and over-the-limit fees. You may avoid certain fees based on how you use your card; for example by making credit card repayments on time.

Credit Card Eligibility and Documents

Credit card eligibility refers to the criteria that an individual must meet in order to qualify for a credit card issued by a financial institution. These criteria can vary between different credit card issuers, but they generally include factors such as age, income, credit score, and residential status.

• Age: Most credit card issuers require applicants to be a certain age, typically 18 or older. Some may have a higher age requirement.
• Income: Credit card issuers often have a minimum income requirement to ensure that applicants have the means to repay the credit card debt.
• Credit Score: A good credit score is important for credit card eligibility. A higher credit score indicates a history of responsible credit behavior and makes you more likely to be approved for a credit card with favorable terms.
• Residential Status: Depending on the issuer, you might need to provide proof of your current address or residency.

It's important to note that meeting these eligibility criteria does not guarantee approval for a credit card. The final decision rests with the credit card issuer based on their assessment of your application and creditworthiness. Additionally, different credit cards may have different eligibility criteria and features, so it's a good idea to carefully review the terms and conditions of the credit card you're interested in before applying.

Documents Required to Apply for a Credit Card

The documents needed to apply for a credit card can differ based on the issuing institution. However, the following are generally the frequently requested documents you would likely need to provide during the credit card application process:

• Identity Proof: Need documents like your Aadhaar Card, PAN card, Driver's License, Passport, or Voter's ID to verify your identity.
• Address Proof: You'll need to submit documents such as an Electricity bill, Telephone bill, Aadhaar Card, or other valid proof of your residential address.
• Annual ITR (Self-Employed): For those who are self-employed or have alternative income sources, providing your annual Income Tax Returns (ITR) might be necessary to demonstrate your financial status.
• Latest Salary Slips: If you are a salaried individual, submitting your recent salary slips can help demonstrate your income and repayment capacity.