As per a recent analysis by the Reserve Bank of India, data showed that the total number of unique credit card holders was expected to reach 25 to 30 million for the financial year of 2018-19. This suggests that a significant portion of the population of India knows about credit cards and their advantages in financial operations.
Such a portion of India’s population who own a credit card are not only salaried individuals but non-salaried and self-employed individuals as well. Compared to a salaried individual, a non-salaried person may seem to face greater difficulty in proving their creditworthiness to a card issuing company.
However, such is not the case. By following several easy steps, as a non-salaried individual, you can easily apply for a credit card with minimum hassle. Before learning about the steps, you should know what a credit card and how beneficial it can be for your finances.
What is a credit card?
A credit card is a regular plastic card issued by financial institutions that allows you to borrow some money from a particular limit and use them for transactions for a specific cycle. Compared to a debit card, the funds do not get deducted from your account; these are subtracted from the total limit for each cycle. This credit limit, which is set by your card issuer, depends substantially on your credit history.
Cardholders can swipe this card for offline transactions and also use it for online purchases and other payments. At the end of each cycle, as a credit cardholder, you are required to repay the borrowed amount in terms of the monthly credit card bill.
In relation to debit cards, credit cards have strict eligibility criteria; and for a successful credit card application for approval, your creditworthiness will come under scrutiny.
How can non-salaried individuals apply for a credit card?
As you learned about credit cards and their strict eligibility criteria, you can understand the concerning issue which is – most non-salaried and self-employed individuals do not possess income proof, which falls among the primary terms and conditions to avail credit cards from several financial institutions.
However, keeping the following tips in mind, non-salaried individuals can also prove their creditworthiness and own a credit card, which are –
- Provide information on your savings account
If you can show the details from your savings account, it can act as proof of income to meet the demands of the eligibility criteria of a credit card.
- Show income proof of your spouse
Several financial institutions also issue credit cards to non-salaried individuals if their spouse is employed and possesses a substantial monthly income.
- Pay off all your existing debts
It is also advised to clear all your prevailing debts before opting for a credit card. As a non-salaried individual, existing debts will hamper your creditworthiness even father; thereby lowering your chances for credit card approvals. So, the presence of unpaid EMIs or other debts is one of the main reasons why you may have been declined a credit card.
- Maintain a high credit score
A high credit score of 750 or above will make salaried individuals more eligible for credit cards. With a good credit score, such applicants can opt for credit cards like the Bajaj Finserv RBL Bank SuperCard. This credit card comes with several lucrative industry-first features.
As a non-salaried individual, you can consult the above-discussed tips and apply for a credit card. It is advised to learn about credit card bill payments and develop an adept financial strategy to tackle them. This will help to use your credit card wisely and not accumulate debt, which will affect your finances and credit score substantially.