Credit Cards have been one of the most popular banking products among the customers. There are several banks and financial institutions that provide a wide range of credit cards to individuals. With the credit cards in their pocket, individuals can earn reward points on their spendings and cashback offers on several categories such as entertainment, shopping, dining, etc. But there is one thing that is pretty important when you are choosing a suitable credit card for you. This is known as the Credit Card Eligibility as it will decide whether you will be eligible for the credit card you want or not.
There are several factors that define your credit card eligibility and these factors tend to change from one lender to another. Some of these factors are your monthly income, employment type, employment stability, credit score, etc. Before providing you the card, a lender checks your eligibility criteria as this is the only thing that will determine your candidature. In this article, we will be telling you about all the features that affect your credit card eligibility so that you can understand it in a better way. Other than this, we will also be telling you about the credit card payment so that you can know the importance of it. So, keep reading! We are showing you all the factors affecting credit card eligibility one after another below. Have a look! Monthly Income:- When you opt for a credit card and spend with your card, you need to make the credit card payment of the bill within the due date. If you fail to make the payment within the due date, your credit score can get affected and you may also have to pay the penalty and late charges for it. So, to ensure you will pay your credit card bill on time, lenders check your monthly income strictly as you will be paying your bill from this only. So an individual with a higher monthly income will have a higher repayment capacity as compared to an individual who has a low monthly income. Apart from this, your credit limit will also depend on the monthly income of an individual. Employment Type:- Both salaried and self-employed individuals can opt for a credit card but your employment type also plays a crucial role in determining credit card eligibility. When we talk about the salaried individuals, there is a certainty about the monthly income, that’s why lenders prefer to provide the credit cards to salaried individuals as compared to self-employed individuals who can have highs and lows in their business. Existing Debts (Loan EMIs):- Your credit card eligibility can also affect if you have huge existing obligations such as EMIs of personal loan, car loan, etc. When you Let’s understand this how. When you have existing debt, a part of your monthly income must be going towards the monthly installments and you have a lesser repayment capacity as compared to an individual who has no debt to pay. That’s why lenders check if an individual has any debt and then decide if the individual is worthy to get a credit card or not. Credit Score:- Your credit card eligibility also depends on your credit score. It is a three-digit number ranging from 300 to 900 that defines your creditworthiness and repayment behavior. If you have a good credit score which is considered to be 700 or above, lenders are more likely to provide you a credit card with some amazing benefits and offers. If you are starting your financial journey and don’t have a credit score now, you must do your credit card payment on time so your score can build gradually.
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Anika Sharma
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