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Getting a credit
card is not very easy
A Credit Card is a plastic card which
allows you to make purchases on credit
which means “Buy Now Pay Later”. Using
the credit card you can buy what you
like immediately and pay for it in
instalments which is why it is one of
the most popular products that is
offered by any bank. However, issuing a
credit card to a customer has a lot of
risk associated with it for the bank.
Hence, the banks are extremely careful.
Therefore, getting an approval for the
credit card is a difficult task without
having a good credit report backing you.
It is a Catch-22 situation because to be
approved for the credit card, you should
have a good credit report and to get a
good report you need to have credit.
This cycle does not approve credit cards
for those without previous credit,
limited credit or negative credit
report. But you can get a credit card by
getting to know the types of credit
cards that are available in the market
and know the methods to build a good
credit report for your self.
You should decide which type of credit
card you want to apply for depending on
your present situation. Suppose you are
studying, then you should apply for the
student credit card. However, if you are
not a student and a person who has not
taken credit before then the card which
is safe and secure and has a co – signer
will be the best bet for you. With such
a card the co – signer is the guarantee
that you will pay your credit card debt
on time, which means that if the card
holder does not pay his debt then the co
– signer has to do it. According to the
historical reports, 75% of the time the
co-signer is forced to repay the debt.
Additionally, the bank which issued the
card will first try to get the money
without going in for a settlement with
the holder of the card. The same methods
can also be applied to the co – signer.
They may be sued in court. Worst part
is, if the debt isn’t repaid, then the
credit reports of both the card holder
and the co – signer will be dented.
In spite of all these risks, the co –
signed card is a great tool for a
relative or a friend to build a good
credit report so that one fine day they
will be able to get their own credit
card. The three options that can help
you are: pre – paid, secured or co –
signed credit cards. However, these
options should be used only till you
build a good credit report to get
approved for the normal credit card.
You should know how the banks determine
your credit worthiness. This will help
you get a credit card. It is referred to
as the “3 C’s of Credit”; collateral,
character and capacity. Collateral is
the assets owned by you to guarantee
your debts, character is your length of
employment, credit history, etc and
Capacity is how capable you are to pay
your debts.
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