Credit Card for Pensioners: 4 Ways to Get – Low Income Cards, Against FD
But can a pensioner get credit card in India?The answer is YES. There are four ways, a pensioner can get credit card as follows:
- Especially designed for pensioners
- Normal card – If pensioner continues to work after retirement, then they can apply for such cards.
- Card against securities i.e. fixed deposit
- Supplementary card
Credit Card for PensionersAt present, there is only one card for pensioners in India offered by Bank of India. This credit card exclusively designed for pensioners has credit limit which is three times the monthly pension earned. For e.g. if the pension is Rs. 25,000 per month, then the credit limit offered would be between Rs. 70,000 – Rs. 75,000. There is no joining fee on the card and the billing cycle is from the 16th of current month to the 15th of next month.
Credit Card for Low Salaried PensionersEvery one wants to continue working after retirement and keep earning money and also keep themselves busy. If after retirement, the pensioner continues to work or is self employed offering consulting service or does small business, then they can apply for cards at various banks in India. However if the income is low, then they can apply at following banks offering cards to low income earners.
|Sr. No||Credit Card Name||Minimum Monthly Income Required||Issuing Bank|
|1||Visa Classic for Self Employed||Rs. 4,166||Vijaya Bank|
|2||Visa Classic for Salaried||Rs. 5,000||Vijaya Bank|
|3||Classic for Salaried||Rs. 5,000||Syndicate Bank|
|4||Classic for Senior Citizen||Rs. 5,000||Syndicate Bank|
|5||Bharat||Rs. 6,000||Indian Bank|
|6||India Card||Rs. 6,250||Bank of India|
|7||Empowerment for Salaried||Rs. 6,666||Jammu and Kashmir Bank|
|8||Canara Visa Classic / MasterCard Standard||Rs. 8,333||Canara Bank|
|9||Visa Global for Self Employed||Rs. 8,333||Vijaya Bank|
|10||Classic for Self Employed||Rs. 8,333||Syndicate Bank|
|11||Gold for Senior Citizen||Rs. 10,000||Corporation Bank|
|12||Visa Global for Salaried||Rs. 10,000||Vijaya Bank|
Against Fixed DepositFixed deposit is one the safest investment product for risk averse investors. If pensioner has any ongoing FD account with the bank, then they can get credit card against fixed deposit or they can open a new FD account and apply for the card. The credit limit offered is 80% – 85% of the FD amount kept with the bank. For e.g. if an individual keeps Rs. 1,00,000 in FD and takes card against it, then the monthly credit limit offered would be in the range of Rs. 80,000 – Rs 85,000. The table below shows cards offered by various banks against FD:
|Sr. No||Credit Card Name||Minimum Fixed Deposit Amount Required||Card Issuer|
|1||Signature||Rs. 10,000||Andhra Bank|
|2||Payless||Rs. 15,000||Development Credit Bank|
|3||Aspire||Rs. 16,000||Central Bank|
|4||Coral||Rs. 20,000||ICICI Bank|
|5||Instant Platinum||Rs. 20,000||ICICI Bank|
|6||Insta Easy||Rs. 20,000||Axis Bank|
|7||Assure||Rs. 25,000||Bank of Baroda|
|8||Usecure||Rs. 25,000||Union Bank of India|
|9||Unnati||Rs. 25,000||State Bank of India|
|10||Solaris||Rs. 25,000||Kotak Mahindra Bank|
|11||Aqua Gold||Rs. 25,000||Kotak Mahindra Bank|
|12||Advantage Plus||Rs. 25,000||State Bank of India|
|13||Galaxia||Rs. 1,00,000||Kotak Mahindra Bank|
- No credit history check
- Low interest rate
- Very minimal documentation
- No income criteria so no need to provide income related documents such as salary slip, IT returns, etc.
Supplementary CardAlso called as add-on card, if any family member (pensioner’s wife/husband, son, daughter) owns a credit card then they can apply for a add-on card. However the criteria to apply for such card is that, the credit score of the primary card owner should be good and he/she should not have taken add-on card already. But make sure, to make repayment on-time and fully against the secondary card. Otherwise, credit score of both primary and secondary card owner gets affected negatively. Although a pensioner continues to receive money in the form of pension the money may not always be sufficient to meet their financial objectives such as foreign trip, buying electronic accessories, etc. Although this can be achieved through their personal savings but this money should ideally be reserved for emergency medical expenses, marriage of children, or others. Owning credit card after retirement has many benefits:
- Pensioner can build credit history
- Not rely on personal savings or others for money
- By making regular payments and using the card honestly, they can avail card with higher limit or loan in the future.
Tips for pensioners to achieve good credit scoreGetting any type of credit after retirement is difficult compared to when you are earning. But if pensioner succeeds to get any type of credit (e.g. personal loan, car loan, credit card, etc.) then he/she should take this as an opportunity to build a good credit score. Here are some of the basic tips to achieve a good credit score:
- Never miss any payment. Always pay before the due date.
- Pay the bills fully
- Never spend above the credit limit
- Never use your credit card for cash withdrawal at ATMs
- Do not frequently apply at too many banks for the credit
- Make sure to ask your lender, whether repayment and other financial transaction data is updated at credit rating agencies. This is extremely important when you apply for any other type of credit in the future with the same or different bank.
This article has been written by Chandra Mehta.
Chandra is a seasoned banker with 20+ years of experience in banking and financial services industry. He’s a retired banker and has served as Chief Manager and Assistant Vice President in State Bank of India/or its subsidiaries.
He has authored many articles on this site (allonmoney.com).