Credit cards have become the need of the hour for most people these days. It helps people with poor earnings get a surplus of funds for any urgent or important large payments, and allows those with higher earnings to manage their finances better through the month. Besides that, most credit cards offer plenty of saving opportunities with discounts and cashbacks offered through their associated partners. All in all, credit cards have become an extremely useful financial tool today.
Most card issuers, whether banks or other financial companies, require a certain set of criteria to be met before they provide a card. A good CIBIL score often ranks high in this eligibility set. But does that mean a credit card for low CIBIL score applicants is a distant dream? Certainly not! There are many ways people with poor CIBIL ratings can obtain a credit card. But first, what is a CIBIL score?
CIBIL Score and Its Role in Procuring a Credit Card
A person’s CIBIL score is represented by a three-digit number, ranging from 300 to 900. It is determined by timely payments of your credit card, when loan repayments are done and if you have ever delayed or defaulted payments towards the loan or the credit card. A higher score improves your chances of getting credit cards or loans. On the other hand, a loan or a credit card for low CIBIL score persons, is more likely to get rejected.
Banks and financial firms tend to determine CIBIL scores before they approve a loan or issue a card to anyone. For this, they will request to see all your relevant income and tax documents as well as details of previous loans or credit cards. This is their way of checking whether you are capable of timely repayments, so that they can eventually avoid long-term losses. Financial institutions will verify these documents as well as your previous credit history and check if the score thus calculated deems you eligible for a credit card or not.
5 Tips for Obtaining a Credit Card
Having said this, there still are a few options to get a credit card for low CIBIL score. You must remember, though, that there could be several additional terms and conditions that must be adhered to. Such options will also not have the same benefits that are offered to people with higher CIBIL scores. Please make sure you clearly understand all the terms of agreement that the issuing bank places on your request, before accepting the card.
Here are 5 effective tips to get a credit card for low CIBIL score applicants:
- Secured Credit Card: One of the easiest ways to get a credit card, despite having a low CIBIL score is to begin a fixed deposit with your bank. That way, your chances of getting a credit card approved is high. The maximum credit limit will usually be equivalent to the deposit amount.
- Add-on Card: If your family member already has a credit card, he/she can apply for an add-on card in your name, which you can use to build your own credit score. But please note, the total credit limit will be shared between you and the primary cardholder.
- Primary Bank-issued Card: If you don’t have a credit score yet, are young or have never had any debts until now, you can contact your primary bank for a credit card. Since they are likely to better understand your risk and financial profile, you have a higher chance of getting a card through them.
- High maintenance fee card: Certain cards may be availed by paying high fees to be able to use them. While this might solve your immediate financial requirement and help build a fair credit score, you should try to switch to a credit card with better terms as soon as possible.
- Card backed by Savings account: Very few banks offer the facility of availing a credit card against your existing savings account. Although a CIBIL score will not be checked in this scenario, the bank can view your account balance and gauge your ability to make card payments.
In your search for a credit card, make sure you choose one that has features that suit your requirements. The Bajaj Finserv RBL Bank SuperCard, for instance, offers instant approval of credit card applications with some basic documents and the bare minimum eligibility criteria. It’s also a great choice if you want a card to make large purchases (for example, to buy electronic products) since it allows you to convert your payments into EMIs.
In today’s digital era, the SuperCard’s features of zero-fraud liability cover as well as security in-hand, are also very impressive. And if that’s not enough, you can even make payments using any reward points that you accumulate while using the credit card. Indeed, this card may very well be a great choice for a credit card for low CIBIL score applicants.