If you ask any credit card user about the most attractive feature in the card, the answer will be Free Money. It is nothing but the credit offered by the issuing bank for a certain time period every month. Although there is no free money because you have to pay back whatever you owe. Same applies to credit card as well. Even though banks offer free money but it is only for a certain time period known as interest free period. And if the card user is unable to pay back the dues before the due date, banks charge a very heavy penalty known as interest rate.
The amount of money given for free, for a fixed time period, depends two most important criteria i.e. applicant’s income and credit score. Although there are many other factors as well, income and credit score is requested by almost every bank in India.
Higher the income, higher would be the credit limit and the applicant stands in a good position for the card approval. And lower income means lower chance of the approval. Your income is the only criteria through which banks can decide the credit worthiness. This is true in some way but not always true. Because higher income earners can also default on the payment and losses for the bank would be higher, assuming credit limit on the card is high. Typically banks ask for a minimum income of Rs. 10,000 per month.
However it does not mean that poor income earner is not credit worthy or his/her repayment capacity is not good. But practically speaking, banks do not think this way and they place a high income eligibility criteria. The objective behind income criteria is to minimize losses and reduce non-performing assets.
So what about low income earning individuals earning less than Rs. 10,000 per month? Can they get credit card?
There are few banks offering credit cards for poor earners (specifically Rs. 10,000 every month) as shown in the below table.
|Sr. No||Credit Card Name||Minimum Annual Income Required (INR)||Equivalent Minimum Monthly Income (INR)||Issuing Bank|
|1||Visa Classic for Self Employed||50,000||4,167||Vijaya Bank|
|2||Visa Classic for Salaried||60,000||5,000||Vijaya Bank|
|3||Classic for Senior Citizen||60,000||5,000||Syndicate Bank|
|5||India Card||75,000||6,250||Bank of India|
|6||Empowerment for Salaried||80,000||6,667||Jammu and Kashmir Bank|
|7||Canara Visa Classic||1,00,000||8,333||Canara Bank|
|8||Canara MasterCard Standard||1,00,000||8,333||Canara Bank|
|9||Visa Global for Self Employed||1,00,000||8,333||Vijaya Bank|
|10||Classic for Self Employed||1,00,000||8,333||Syndicate Bank|
|11||Visa Global for Salaried||1,20,000||10,000||Vijaya Bank|
But one thing to remember is that – even if you are able to meet the income criteria, your card application approval/rejection is solely dependent on the bank. They may approve or reject the application due to some other reasons as well, such as no income proof, type of job, improper or insufficient documentation, etc.
This is why it is always recommended to use card honestly. Here are some of the advantages offered if dues are paid on time every month, fully, with not utilizing the credit limit fully:
- Higher approval chance of future credit requirement
- Credit history build-up, especially for first time card users or building a credit history from zero.
- Get add-on card for family members
- Higher chances of increasing the credit limit