Credit cards are like a hands-on cash without having the physical paper cash with you. It is much easier to do transactions. In this web and related apps era, Credit cards work as a boon. A sixteen digit number, validity section, CVV number and all you have to do is enter them! This is when one does a online shopping. You can swipe your card. Pay now. And that’s virtual. You pay today by credit card and use that money now, even if you don’t have it with you practically. Use the credit today and pay later. There is a monthly cycle that has to be followed every month, and you can enjoy the money that has been used previously to that day!
Credit cards hence act as a wonderful tool in an emergency. When you are not carrying cash when you do not have access to cash if you have a debit card and want to remove the cash from ATM. But, everything that is boon, comes with something to get it. Or it has repercussions as well. First of all, not everyone or anyone is eligible to get the credit card. There are a few conditions that are to be met before owning the card. The first and obvious condition is, that, one has to be salaried or self-employed. The second condition is a particular salary in case of an employed person or the cash transaction that have to seen or the profit that has to be reflected in the case of a self-employed individual. When these two conditions are met, the third is the credit score. When banks offer a credit card or you apply for one, the credit score is checked. A person with a good credit score say above 650, may get the credit card easily. When one has a low credit score or low CIBIL score, might have to face a few issues in terms of getting a card. But, now comes a question that what if one does not have a credit score? A score is established when there is a credit that is taken for six months or more. Credit is any loan that is taken or credit card that is in use. If you have not taken any credit, there is no score and you are a no history customer. What in that case? It becomes a catch 22 situation that you can’t get a credit without sore and you can’t a score without credit!
While talking about credit cards, if you are employed in an organization and the salary is debited in your account for consecutive months, and if you self-employed and few transactions and profit are reflected for multiple months and banks can have a fair idea if you would be able to manage to pay the bill that a credit card will have, you may apply for a card! It may happen that a credit limit of the card may not be as much as you desire but a minimum amount of say 50,000 Rupees can be given or approved easily when you would be earning 20,000 per month or self-employed condition. If one desired more credit limit, that is achieved by either using a card for months and then putting up a request to banks saying your track record is good in terms or repayment or when there is a salary hike.
It should always be taken care of that with great power comes from the great responsibility. Do not keep on swiping the card beyond that you can’t repay. Also, using the credit card to its 40% is good and healthy but continuous transactions of utilizing more than 40% of total credit limit, drops the score eventually dragging too low cibil score individual!