Everybody wants to have a credit card in his or her pocket. The reason is obvious: a credit card makes life easier. It helps you buy something and pay it later within 30 to 50 days without any interest in the amount. But not everybody can get a credit card as banks thoroughly check the eligibility of an applicant when providing a credit card. This is known as the Credit Card Eligibility which changes from one bank to another bank and one type of card to another type. But there is an important thing that you should know – what are the factors that affect your credit card eligibility?
When you are applying for a credit card, the bank checks your eligibility and there are a few factors that affect it. So, when you apply for a Credit Card, it is important to know them so that you can be easily eligible for a card. These factors are mostly related to your Age, Monthly Income, Employment Type, Credit Score, etc. We will be discussing each of these factors in this article and how you can improve your credit card eligibility. So, don’t wait, keep reading.
Credit Card Eligibility Affecting Factors
As we said, there are a few factors that affect your Credit Card eligibility. We are showing some of them below. Please check out.
Age of an Applicant
The first and foremost thing that a lender checks before providing a credit card to an applicant is the age. The minimum and maximum age to avail of a credit card tend to change from one lender to another. Most lenders ask for a minimum age of 21 to get the Credit Card. individuals below 21 years of age can also apply for a Credit card provided they have a sufficient monthly income. The maximum age will be decided by the lender itself according to the type of card you are choosing.
The second thing a lender checks after the age is the monthly income of an applicant. The reason: When you use your credit card, you need to pay the bills on or before the due date. So, if you would not have a sufficient monthly income, you would not be able to pay the Credit Card bills on time. To prevent this, lenders check the monthly income of an individual. People who have a higher income can get a higher credit limit as they have a higher portion of disposable income towards credit card bill payment. This factor is crucial for both salaried and self-employed applicants.
Amount of Previous Debt (Loan or Credit Card EMI)
If you have an existing obligation in the form of a previous loan or credit card, lenders might feel themselves at risk. If the amount of previous debt is high, you may have to face a problem in getting a credit card. Because a new credit card is nothing but a kind of loan. So, if you haven’t paid the previous loan on time, the lender will not see you as a trustworthy person. It is important for an individual to always pay your credit card and loan EMIs on time.
Any lender would like to check your credit score to see if you have done any default on loan or credit card repayments. But if you are taking a credit card for the first time, and haven’t taken any kind of debt before. In such cases, the lender may provide you a secured credit card against a Fixed Deposit. To enhance your credit card eligibility, you should always pay your credit card on or before the due date. On the other hand, if you have a good credit score (700 or above), you can get a higher credit limit as compared to people who have a poor credit score ( below 650).