What is a credit card? Terms and Conditions to Take Credit Cards in 2022

In this article, we have explained what is a Credit Card? How to use it? And, What are the terms and conditions of taking a credit card? Another credit card related information is given below:

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There are many credit cards available in the market, which offer a variety of benefits, so choosing the best credit card for yourself can be a daunting task. You should compare the best credit cards in terms of your annual fee, features, benefits and offers and apply for the credit card that best suits your needs.

Why should you have a credit card?

In addition to being easy to use, having a credit card is essential for the following reasons:

• It helps in building a good credit score.
• Credit-free period of up to 45 days.
• Easy transaction both online and offline.
• It comes with attractive rewards, cashback, discounts, offers, etc.
• A credit card comes in handy in emergencies
• You can make big purchases with its help and pay later through EMI.
• All transactions are secure as they require OTP and PIN verification

Credit card benefits

People who have a credit card can enjoy the following benefits-

• Welcome Offer: Most banks/credit institutions offer various welcome benefits to the cardholder in the form of vouchers, discounts or bonus reward points.
• Reward Points and Cashback: Every time you shop with your credit card, you get some reward points or cashback in your account. You can use reward points to get gifts and deduct any other item while the cashback goes directly to your card account. If you have a travel credit card, you can earn Air Miles instead of Reward Points which can be used for booking flight tickets.
• Fuel Surcharge Waiver: These days, this discount can be availed on almost all types of credit cards. Whenever you refuel your vehicle, you get a discount on a certain amount of spending.
• Airport lounge access: Some credit cards offer lounge accommodations at domestic airports as well as international airports one or more times a year. Travel-centric credit cards and premium credit cards exclusively offer these.
• Insurance: Credit cards also offer insurance and a fixed cover amount in case of an accident. It can be air accident coverage, card loss cover or foreign hospitalization cover.
• Cash Advance – You can withdraw cash directly from ATM using your credit card. It is very beneficial in case of emergency when you need cash immediately.
• Add-on card – Many credit cards allow you to have an add-on card (known as a supplementary card) that you can share with your family members including your spouse, siblings, children and parents. Add-on credit cards generally offer the same benefits as a primary card.
• EMI Convert – EMI conversion is the most common benefit available on a credit card. You can convert your large purchases into EMIs and make payments over a few months.

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Credit card eligibility conditions

The eligibility for a credit card depends on several factors. Most banks set their eligibility criteria, and the same institute issues different credit cards for different eligibility criteria. While basic information such as age, city, income source, remain the same. Credit scores may differ for all credit card applicants, and the biggest difference may be in the applicant’s income, which is the minimum income required to be eligible for a credit card. Based on the type of card, its benefits, and its annual fee, banks have prescribed income eligibility criteria for each card.

Documents required for credit card application

Documents for credit cards vary from bank to bank, some important documents required to apply are as follows:

• Identity Card and Signature Proof- Passport, PAN Card, Driving License, Voter ID, Aadhar Card, Employee ID Card and Employee Identity Card in case of Government employees.
• Residence Proof- Bank statement, rent agreement, voter ID, ration card, passport, driving license, telephone/electricity/water/credit card bill or property tax.
• Age Proof- Voter ID, Secondary School Certificate (Class 10), Birth Certificate, Passport, Aadhar Card, Pension Payment Order or Proof of Receipt of LIC Policy.
• Income Proof for Salaried Person: Recent 3 Months Salary Slip, Salary Bank Account Statement for 6 Months.
• Proof of Income for Self-Employed Businessmen/Professionals: Recent Income Tax Return and other attested financial documents with proof of business continuity.

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