Common Mistakes When Applying for a Credit Card

A credit card makes daily spending easy and convenient. It lets you go cashless with secure online payments and even offers ‘buy now, pay later’ through EMIs. With so many banks offering credit cards, getting one may seem very easy. But when you actually apply for a credit card, it can turn out to be trickier than you expected. 

It's easy to make mistakes during the credit card application process, and those mistakes can have lasting consequences. That’s why it’s important to keep some essential points in mind and apply them smartly.

Choosing the Wrong Card

How to credit card apply that does not suit your spending habits or financial goals can reduce its benefits. This is why the first task is to find a credit card that fits right with your budget. For example:

• If you are a frequent shopper, then you should opt for cards that have cash back and retail rewards

• If you travel frequently, apply for a credit card that has travel benefits

The same rule applies to dining, fuel refills, and other expenses. Try to find one that offers a low interest rate or no annual credit card charges. Compare benefits, interest rates, and fees. Choose a card that aligns with your lifestyle and financial behaviour.

Skipping the Terms and Conditions

Do not ignore the terms and conditions, which may include hidden fees or restrictions on rewards. Ensure that you check the following details before applying:

• Interest rate (APR)

• Annual and renewal fees

• Late payment penalties

• Reward point expiry

Wrong or Missing Details

Errors in the application form, such as incorrect income, contact information, or employment data, can lead to immediate disqualification. Double-check the information you put in before submission. Common mistakes can happen, like: 

• Typos in PAN or Aadhaar number

• Mismatched income proof

• Incomplete residential address

Unsteady Income

Issuers prefer applicants with a stable and documented source of income to ensure repayment ability. Your application might get rejected if you have: 

• Irregular income through freelancing

• Contractual income without proof

• Gaps in employment

• Large variations in income over time

Some issuers offer cards specifically for self-employed individuals and business owners. To get these cards, you need to submit your Income Tax Returns (ITRs) and business proof, and it should match their criteria.

Not Giving Priority to the Eligibility Criteria

Each credit card has specific requirements for applicants, including:

• Minimum monthly income

• Minimum age (usually 18+)

• Residential status (some cards are only for Indian residents)

These requirements vary from issuer to issuer, and you need to check that particular issuer’s eligibility requirements before applying. 

Job Doesn’t Match Rules

Some credit cards target only specific job categories, like salaried employees or professionals from approved sectors.

For example, if a card is meant for corporate employees, it may reject self-employed applicants. So, read the employment requirements and choose a card that matches your profession.

Too Many Loans

If you already manage several loans or EMIs, lenders may assume you’re financially struggling. A high debt-to-income ratio lowers your creditworthiness.

Reduce your ongoing debts before applying to improve your chances of getting approval and a good credit limit.

Applying Too Often

When you apply for multiple credit cards within a short time, credit bureaus lower your score due to repeated hard inquiries. Apply only when you meet the card’s eligibility criteria. Also, pause for some time since your last application and then apply again. 

Proper Way to Apply for a Credit Card

Applying for a credit card is not just about filling out a form. It is a financial decision that can impact your credit score, spending habits, and long-term goals. Here’s the right approach to apply for a credit card:

• Understand Your Needs: Decide if you want a card for rewards, travel, low interest, or basic use.

• Check Your Credit Score: A score above 750 improves approval chances.

• Compare Cards: Look at interest rates, fees, benefits, and reviews across banks.

• Check Eligibility Criteria: Ensure you meet the card’s requirements, most importantly, the income, age, and employment.

• Gather Necessary Documents: Keep your PAN, ID proof, address proof, and income documents ready.

• Apply: Use the bank’s website or visit a branch to apply for the credit card. Enter accurate and complete information while filling out the form.

• Submit for Approval: The bank may contact you for verification before issuing the card. You will get the status on the bank’s website or app. 

These are some of the most crucial factors that can determine how your credit card journey will be. If you apply for the card constantly without keeping the factors in mind, you will face countless rejections. Not only will it waste your time, but also the hard inquiry during the application process will lower your credit score. 

You should go for a credit card that offers easy application and doesn’t demand too much from the applicants. Take the One Credit Card as an example. The card offers benefits for all kinds of users. The application process is simple as well; just follow the step-by-step process online and get approved in minutes.

After getting the card, manage everything easily through the secure OneCard App. Some of the best features about the app are that you can set a budget and track your spending. Every month, earn 5X reward points on your top spending categories, along with exciting discounts on travel, dining, entertainment, and more.