A credit card is an important financial instrument which is issued by the banks to customers. Customers are the beneficiary users of the card. A credit card can be used to purchase, make online transactions, book air tickets and many more other benefits can be accessed. Banks issue credit cards to customers with a line of credit to avail the benefits and the cardholder must pay the amount before the due date. There are different types of credit cards issued by the bank and it is up to the consumers to decide which one he needs. There are a lot of things that a consumer should keep in his mind while applying for a credit card.
Following are the things you should know before applying for a credit card:
1. The bank will want to know your income information to see if you can pay back the dues of your credit card bills. Your income plays a vital role in this case. The more you earn the more choices you have regarding the availability of card.
2. When a customer is issued with a credit card by the bank, his/her credit limit is initially lower. The bank will check your paying capacity, if your paying capacity impresses the bank then they might increase your credit limit.
3. You must know the interest rate bank is charging from you in case you default to pay the credit card bills on its due date.
4. A credit card holder should be aware of all the charges related to the card. The charges a credit card may hold could be annual maintenance charge, joining fee, cash advance fee, over-limit fee, late payment charges, foreign transaction fees, GST.
5. A credit card holder has the opportunity to make a good credit score by managing and paying the debts on time. A consumer’s credit score is largely affected by non-payment of dues and an unbalanced income source.
6. Credit cards may provide you with a lot of rewards and benefits. Card holders must know how the rewards work and also how to avail the benefits offered. The rewards and benefits can be of welcome gifts, cash back benefits, travel benefits, air-port lounge access, insurance coverage, etc.
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