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    Applying for credit card: Go through the checklist

    Are you planning to apply for credit cards? Do you know that holding a credit card is a big responsibility and the card must be utilized properly?

    But even before that credit card application should be made with responsibility and you must ensure that you must extract maximum benefit at the time of application.



    Here are some important aspects to look at before you apply for card:

    Credit card payment due date must be after your salary date:

    For salary earning people it becomes easier if the payment due date of credit card is after the salary date. Payment due date is the date by which you must pay your credit card bill. A credit card company provides generally a credit limit of up-to 45 days. This means that from the last billing date to next payment date, you can get 45 days of time frame. Let us understand this with an example. A credit card company bill date is 15-Mar. This means that if you do transaction on 16th March, you will get around 45 days to make payment for the transaction.

    The billing cycle should be such that you pay your bill from the salary. It would good to have a payment date between 3rd to 7th of the month for a salaried person, for others this date should be the date on which they are expecting a good cash inflow.

    Don’t go for cash limit, ask for limited credit limit:

    On credit cards, you may be given cash limit by the card issuer based on your profile. It is good not to go for cash limit at all. Cash withdrawal from credit card comes at a very high rate of interest. So if you end up withdrawing money, the rate of interest paid on the card will be very high.

    When you withdraw cash from a credit card, you have to pay a Cash Withdrawal Fee + Daily Basis Markup. So it is damn expensive and very bad for everyone.

    This is likely to put you in debt trap. Also ask for limited credit limit as this will help you in containing your expenses on card.

    Apply for two credit cards with moderate credit limits than one card with very high credit limit:

    It makes sense to apply for two credit cards with moderate credit limits than one card with high credit limit. This will help you to spread your payments and also reduce the risk of liabilities arising out of fraud. But it is important to note that you must use your credit cards especially when you receive your new credit card. Some banks charge you amount of the Annual Fee in start, but doing some level of transaction they wave the annual fee.

    At the time of activating your credit card, make sure to check your Annual Fee and Shopping wave criteria. After a completion of one year, some banks again gives you a bucket to do the transaction to wave the Annual Fee.

    Apply for credit card Only when you need it:

    Many people hold card for the sake of it. Don’t do this. If you use your credit card sensibility it will help to improve your credit score. Not using the card for long, can result into cancellation of card.

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