The basic point of difference between a credit card and a debit card is that the latter is issued against a credit sanction up to your credit limit and the former against your savings or current account. The credit card issuer in effect lends you money basis the amount sanctioned to you. In contrast, when you swipe your debit card, the money will get directly deducted from your bank account.
Thus, a credit card helps you leverage your finances by allowing you to make credit purchases and fund short-term financial needs. Also, credit cards offer cash back, reward points, and other perks such as airport lounge access. Looking at these benefits, you may be tempted to apply for a credit card right away. However, to harness a credit card’s full potential, it is imperative that you take note of these four important aspects.
Choose from various types of credit cards according to your needs
A credit card provides reward points on transactions, and these points are based on the type of credit card you hold. While issuers offer a variety of cards, not all credit cards are built equal. So, choose the one that best meets your requirements. For instance, travel credit cards offer benefits on every travel transaction you make using the card. You can use the accumulated reward points earned on this card and convert them into air miles and use the same to book airline tickets or upgrade seats.
Other advantages include air miles, free or complimentary access to airport lounges, and maybe even discount from various travel aggregators. In contrast, shopping credit cards give reward points, and cash back offers on various apparel and lifestyle purchases. Some credit cards provide waivers on fuel surcharge while other cards may address various lifestyle needs.
Check the eligibility criteria of the credit card
Issuers set certain eligibility criteria to apply for a credit card. This helps them weed out the applicants who are not creditworthy. So, before you apply make sure to check these criteria and work on meeting to enjoy higher chances of approval.
For instance, the feature-rich Bajaj Finserv SuperCard has the following criteria:
- You must have a credit score of 750
- Your age must be between 25 and 65 years
- Your credit report must not have any defaults or outstanding dues
- You must have an existing relationship with Bajaj Finserv
- You must have a Bajaj Finserv EMI Card
- You must reside in a SuperCard live location in India
Applying for multiple cards in a short timeframe may lead to rejection
In a bid to get at least one credit card approved, you may consider applying for multiple cards simultaneously. However, this has an adverse impact and can increase the chances of rejection. This is because every time you apply for one, the issuer runs a hard inquiry with a credit rating agency that reflects on your credit report. These multiple applications also term you as credit hungry.
Untimely payment of bills can land you in a debt trap
Most credit cards offer you a 45-day window period to repay your dues. During this time, you won’t be charged interest. So, it is important to pay off the whole outstanding amount in time to avoid late penalties. If not paid, such penalty is carried forward to the next billing cycle and attracts additional interest. Though you have an option to make a minimum payment to avoid interest charges, choose to pay the whole outstanding amount because the balance amount still attracts interest.
Credit cards offer additional features that add to your convenience
Some credit cards offer other features that add to your convenience of usage. For example, Bajaj Finserv RBL Bank SuperCard offers up to 50 days interest-free ATM cash withdrawals. Additionally, you can also convert the pre-approved credit limit into a personal loan and pay no interest for up to 90 days. Use these features to make the best use of the card in emergencies. In case you make a purchase of over Rs.3,000, you can choose to convert credit card bill to EMI.
With these five tips handy, you have an idea of the important aspects of a credit card and its application criteria. Before applying for a credit card, check your pre-approved offer from Bajaj Finserv to enjoy instant approval.