What is a credit card? A credit card is a thin rectangular piece of plastic or metal issued by a bank or financial services company, that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment.
Credit Card
Credit cards set a law that cardholders pay back the borrowed money, plus any applicable interest, as well as any additional, agreed-upon charges, either in full by billing date or over time.
In other words, the standard credit line, or the credit card issuer may also grant a separate cash line for credit to cardholders, enabling them to borrow money in the form of cash advances that can be accessed through bank tellers.
They typically charge a higher annual percentage rate (APR). versus other forms of consumer loans. Interest charges on any unpaid balances charged to the card are typically imposed approximately one month after any purchase is made unless previous unpaid balances had been carried forward from the past month.
Types of Credit Cards
Some credit cards earn rewards, some save money on interest, and some help you build or rebuild credit. With lots of credit cards on the market, understanding which one is right for you can be overwhelming. Now it is classified into 3 types and below are some of them.
- Rewards credit card: This card gives you something back with each purchase. Such cards generally include cash-back cards, which earn back a percentage of your spending, and travel rewards credit cards, which typically give you points or miles for purchases you make.
- Low-interest credit card: if your credit bill is in full every month, then the interest rate on your card doesn’t matter. That’s because interest is charged only when you roll debt from one month to the next. But not everyone can pay in full, and there are cards specifically designed for people who are carrying debt.
- Credit-building cards: consumers with poor credit scores, or who are new, may find a card that can help to build or improve their credit. Secured credit cards are one of the best ways to build credit. They require a security deposit, which is usually equal to your credit limit.
Above are the 3 Classified Credit Cards.
Document Required for Credit Card Application
To apply for a credit card, the following requirements must be presented;
- Duly filled and signed application form.
- A valid means of identity verification includes an Aadhaar Card, PAN Card, Passport, Voter’s ID Card, Driving License, and Ration Card.
- Residence verification which includes Aadhaar Card, Passport, Voter’s ID Card, Driving License, Ration Card, Rent Agreement, Property Documents, and Utility Bills
- Salary slip or paycheck for last 3 months, Bank statement, and Income Tax Return.
- Full Legal Name
- Social Security Number.
How to Apply for Credit Cards
For anyone interested in applying for the card of their choice should kindly follow the below steps and guide to achieve that.
- Go to your web browser and search for https://www.capitalone.com/credit-cards.
- Scroll down and click on apply on any of the credit cards of your choice.
- Enter the following: personal information, contact information, financial information, additional information, and important disclosures in their required fields.
- Click on the “Continue” button.
If you don’t qualify for the card you choose, they may consider you for other cards.
What Are The Best Credit Cards To Apply
If you are looking forward to applying for a new credit card for your personal needs, below are the top 5 best credit cards to apply for:
- Wells Fargo Active Cash Card.
- Chase Freedom Flex.
- Capital One Venture X Rewards Credit Card.
- Chase Sapphire Reserve.
- Discover it Cash Back.
These are the best personal credit cards to use.
Frequently Asked Questions
How do I Start Applying for Credit Cards?
Searching for the right card can and getting approved can be nerve-wracking sometimes. And most times, you might not know where to start, what details are required, or even how to increase your chances of being approved.
That is why it is important to make your research and learn as much as you could get before applying. Follow the below to improve your chances of getting approved for a card:
- Firstly, know your credit score as it is the most important factor in getting approved.
- After you might have known the card type you can get with your credit score, think about what your needs are for the card.
- Learn about the terms of using a credit card.
- Preapproval may not guarantee you get the card, however, it is important to check for card preapproval.
- Know all the information you need and gather them. Some of the information you will be needing; Full legal name, date of birth, address, valid means of identification, social security number, and annual income. Also, prepared for some additional information which may include your e employment status, how long you have been employed, etc.
- Determine the repayment strategy you will use because the cards come with the responsibility of making payments.
- Choose the application method you want to use and proceed.
How Can I Qualify for a Credit Card?
To qualify for a credit card; the following will be put into consideration;
- Ensure that you are of the legal age to get a credit card which is 18 years and older.
- Have a means of getting income
- Have a good credit history.
- Ensure that you don’t have a lot of debt or loans.
- If getting a credit card on your owner is hard, then get a co-signer
- Save up for a security deposit.
How Can I Get a Credit Card for The First Time Online?
Whether you get the credit card on your first application depends on you. The credit history you have is important factor issuers consider before approving your application.
Nevertheless, you can with the right information and strategy, your chance of getting a credit card on the first application is sure. Your age and proof of making repayments are huge factors.
Another important thing is to put down a security deposit on your secured credit card to build your credit history.
Why is it so Hard to Get a Credit Card?
Some factors fuel this and they include your age, too much debt, lack of enough income, and low credit score. These factors depend on whether or not you can get a credit card. In most cases, you might have met all the important factors but no social security number. Not having a social security number means no credit card for you too.
How Much Should You Spend on Your First Credit Card?
A vital step towards getting a better credit score is spending below your credit limit.
How Much Income Do You Need for a Credit Card?
Technically, there is no minimum income requirement to get approved for a credit card. A higher income gives you a better chance of getting approved and having a higher credit limit. However, you must show that you have a means of income.
How Often Should You Apply for a Credit Card?
Generally, it is advisable to stay up to six months or more before applying for a new credit card.
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