A credit card can significantly improve your credit profile and can also be an excellent savings tool. In India, where credit usage is not yet widespread, many people still view credit cards as a luxury rather than a practical financial tool.
Despite this, the credit card industry in India has grown at a compound annual growth rate (CAGR) of 20% over the past five years, with the number of credit cards exceeding 78 million by July 2022.
If you are considering applying for a credit card in India, you might be unsure about the eligibility requirements. Many people hesitate to apply because they fear they might not qualify. However, understanding the eligibility criteria can clarify this for you. In this blog, we’ll explore how credit card eligibility works, so let’s get started.
What are Credit Card Eligibility Criteria in India?
Here’s a breakdown of the key credit card eligibility criteria in India:
Age
To apply for a Credit Card, you typically need to be between 18 and 60 years old. This age range ensures that applicants are legally adults and not approaching retirement. Some card issuers may have slightly different age requirements.
Income
Your income is an important factor in determining credit card eligibility. Banks require proof of a stable income to ensure you can pay off your credit card bills. Different types of credit cards have varyingDebt minimum income requirements, with premium cards generally needing a higher income.
Employment Status
Your job status significantly affects your credit card application. Those with a salaried position often have an easier time securing a credit card because they can provide evidence of a regular income. Self-employed individuals and entrepreneurs can also qualify, but they need to demonstrate a higher stable income.
Credit Score
Your credit score, ideally above 750, reflects your history of managing credit responsibly. This score is derived from your credit history, including previous loans, credit cards, and your repayment behaviour. A high credit score indicates that you are a low-risk borrower.
Residential Status
YBoth resident Indians and Non-Resident Indians (NRIs) can apply for credit cards. NRIs may need to provide additional documentation to verify their employment and living arrangements abroad.
Banking Relationship
If you already have an account with the bank, it might be easier to obtain a credit card. Your existing relationship with the bank can sometimes help offset lower credit scores or income levels.
Existing Loans and Liabilities
If you have other loans or significant debts, it can impact your credit card eligibility. Lenders evaluate your Debt-to-Income Ratio to ensure you can handle additional credit without becoming financially overextended.
What are Documents Required for Credit Card?
The specific documents required for a credit card application in India can vary slightly depending on the bank and the type of card you’re applying for. However, here are the most common documents you’ll need:
General Documents
These documents are commonly required for most credit card applicants:
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Proof of Identity
Aadhaar card, PAN card, passport, driving license, or voter ID card. -
Proof of Address
Aadhaar card, passport, driving license, voter ID card, utility bills (electricity, gas, water, telephone), or rental agreement. -
Income Proof
Salary slips, Form 16, bank statements, or ITR returns.
Extra Documents for Self-Employed Individuals
If you are self-employed, you might need to submit additional documents to prove your income and business operations:
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Proof of Business Ownership
Partnership deed, GST registration certificate, or business license. -
Income Tax Returns
Previous years’ income tax returns to demonstrate your income. -
Bank Statements
Business bank account statements to show income and expenses.
Extra Documents for Non-Resident Indians (NRIs)
NRIs must submit these documents to get a credit card in India:
-
Indian
PassportValid passport with an Indian address. -
Overseas Address Proof
Utility bills, bank statements, or rental agreements from your overseas address. -
Indian Address Proof
If you own a property in India, you can submit property documents or rental agreements. -
Income
ProofOverseas income tax returns or salary slips. -
Visa/OCI Card
Proof of your visa or Overseas Citizen of India (OCI) card status.
Factors Affecting Credit Card Eligibility Criteria
- 01
Credit History
This shows your past financial behaviour, especially how consistently you’ve made credit payments. A positive history of timely payments improves your chances of approval, as it demonstrates that you are a reliable borrower.
- 02
Debt-to-Income Ratio
This ratio compares your monthly debt payments to your income. A lower ratio is better, as it suggests you manage your debt well and are less likely to have trouble with new credit.
- 03
Number of Existing Cards
Having several credit cards can be both beneficial and risky. While it might show your experience with managing credit, too many cards could raise concerns about your financial stability and affect your eligibility negatively.
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FAQs
Is Aadhaar-linked mobile number mandatory for credit card applications?
Yes, your mobile number must be linked to your Aadhaar for identity verification purposes when applying for a credit card.
How can I build a good credit score?
Establishing or improving your credit score involves responsible financial behaviour. This includes consistently paying your credit card bills and utility bills on time. Even if you have a poor credit history, making timely payments can help you rebuild your credit over time.
