In today’s financial world, credit cards are a necessity in our everyday lives. Getting a credit card is not difficult and requires little effort, except for the sometimes-stringent eligibility conditions banks have set up.
Once you identify which bank to apply for and the category of card you qualify for, it becomes easy. But with the variety of cards available today and the different eligibility criteria set by banks, it can get confusing at times.
In this article, we will understand what credit cards are, their different types and benefits, the eligibility criteria for getting one, as well as how to apply for credit cards in Dubai.
A credit card is a small card (usually made of plastic) that allows you to borrow money from a bank in the form of credit. You can use the card anywhere where it is accepted as a form of payment. You can pay off the amount owed on the card in fixed installments over a period of time, and interest will be levied if you do not pay it off. You will be charged interest on the amount you borrow. This is known as the credit limit, which represents the maximum amount you can borrow from the credit card lender.
If your credit score exceeds 750 and you have a steady income, you can apply for one of the following credit card types. All other credit card types are not as popular, and you will have a difficult time getting approved for them.
i. Revolving Credit Card: Technically, all credit cards are a form of revolving credit. A revolving credit card is a type of credit card where you can borrow and repay money as you require. The interest rate for revolving credit cards is usually higher than for other types of credit cards.
ii. Travel Credit Cards: Travel credit cards are designed to aid your travels by providing an easy way to book hotels and flights, pay for rental cars and buy travel essentials, such as food and souvenirs. Some travel credit cards come with attractive perks and rewards like free airport lounge access, free baggage check-in and travel insurance.
iii. Cashback Credit Cards: Cashback credit cards offer a cashback on every purchase you make with the card. The cashback percentage varies and is usually a percentage of the total amount you have spent on your card. You can use your cash-back credit card to make purchases online or at offline retail stores.
iv. Premium Credit Cards: Premium credit cards are designed for particular use cases, like frequent travellers who spend a lot of time on airplanes. These cards offer lucrative rewards and come with features like lounge access, free travel insurance and free airport assistance.
v. Balance Transfer Credit Cards: Balance transfer credit cards are designed to transfer the current high-interest debt you have on another credit card to a new card with a zero percent interest for a certain period of time.
Whether you are a frequent traveller or like to do online shopping, a credit card can be a helpful financial tool in a number of situations. Here are some common scenarios in which a credit card might come in handy.
– Airline tickets: Credit cards are accepted by airlines for booking flights. If you are planning to travel and need to book a ticket with a specific airline, you can use a credit card to book the ticket and avoid paying cash on hand.
– Hotel bookings: You can use a credit card to book a hotel room and pay the bill later.
– Emergencies: If you have an unexpected medical emergency, you can use a credit card to cover the costs and pay off the debt at a later date.
– Shopping: You can conveniently use a credit card to pay for your purchases and pay the bill later.
If you have a steady job, an active bank account, and good credit history, you should be able to apply and qualify for one of the above credit card types. Banks have different eligibility criteria for each credit card type. It would also help if you read the fine print before applying to see which credit card type you qualify for.
A good credit score is the most critical factor in your credit card application. Credit cards are unsecured loans, and banks lend money based on your credit history. A good credit score makes it easy to get a credit card. If you have a poor credit score, you will find it difficult to get a credit card.
Before you apply for a credit card, you should read the terms and conditions of the card and make sure it fits your requirements. Once you decide on the credit card type you want to apply for, you should follow these easy steps to apply for a credit card.
– Choose a credit card: Once you have decided on the type of credit card you want to apply for, you should open the website of the credit card company and search for the card. Make sure you read the terms and conditions before applying for the card.
– Apply for a credit card: Each credit card company has a different application process. Some credit card companies will ask you to fill out an online application form, while others will ask you to visit their branch.
– Get your credit report: A credit report contains information about your past credit history. It is essential to check your credit score on your credit report before applying for a credit card.
Here are a few crucial pieces of advice when applying for a credit card.
– Compare the different credit card types and terms and conditions before applying for a credit card.
– Do not apply for multiple credit cards at the same time. Credit card companies monitor your credit application and will see numerous applications as a sign of financial distress. This may negatively impact your credit score.
– Use your credit card responsibly and make sure you pay off your credit card balance on time every month. This will help you build or improve your credit score.
– Keep an eye on your credit card statement and make sure you do not miss any payments. Missing a payment is bound to have a negative impact on your credit score.
Credit cards are a necessity in today’s financial world. You can utilize a credit card to pay for everything from travel tickets to emergencies at home. This guide has hopefully helped you with understanding what credit cards are, their different types and benefits, and how to apply for a credit card in Dubai.