How to apply for a credit card in just 6 steps

Applying for your first credit card? Getting credit for the first time isn't always easy. Most creditors want you to have credit before they'll give you credit, which makes it kind of tough to get started. Once you've gotten credit for the first time, the next time will be a little easier. 
The best way to start is with a basic card with no annual fees, low spending limit that is suitable for your current income level. Don’t aim for the premium or super premium cards which have a much higher eligibility and have hefty annual fees. Use your first card to create a healthy credit history and in time, you will become eligible for the premium cards with better features and higher spending limits. 
Don't be so eager to get started with credit that you make a mistake that hurts your chances of getting approved. Here are some things to keep in mind when you're applying for credit for the first time. 

1. Check your credit score. 
Knowing your credit score can help you determine what credit card to apply for. If you have fair credit, for example, you may not want to apply for a card that clearly states that only applicants with excellent credit will be approved. 

2. Determine what type of card you need. 
If you’re a first-time applicant, it’s probably a good idea to go for no annual fees and a low interest rate. One card should be enough to start with, as it limits the risk of you getting confused by multiple payment due dates. 

3. Choose where to apply. 
Already have a savings account? Applying for a credit card from a bank where you have an account may be a good idea, since you have an established history there. 
An existing banking relationship could improve your chances of getting a credit card application approved, especially if you’ve handled your account responsibly, such as no overdrafts. 

4. Check to see if you’re pre-qualified. 
Some of the big banks, such as American Express, Citibank, Kotak Mahindra Bank etc., allow you to see if you’re pre-qualified for a credit card. This requires some work on your side — you typically need to fill out a short form and submit personal information, including your PAN number and Aadhaar details. This triggers a soft inquiry, which won’t affect your credit score. 
If you’re rated as “pre-approved” or “pre-qualified”, this means you’ve met all the criteria so far. However, you still need to apply for the card and being fully approved will depend on other factors, including your income. 

5. Prepare for a dent to your credit score. 
When you apply for a new credit card, it usually triggers what’s known as a hard inquiry on your credit report. Hard inquiries generally occur when a financial institution, such as a bank or credit card issuer, checks your credit report when making a lending decision. 
A hard inquiry can lower your credit score by a few points and may stay on your credit report for as long as two years. The good news is that a hard inquiry might not affect your score as much as you’d think, and the damage usually decreases or disappears as time passes. 

6. Use credit card best practices. 
If you get approved for a card, congratulations! A credit card can be a really useful tool to help build your credit score over time. However, now that you have it, remember that it’s a tool that requires maintenance and attention on your end. 
Educate yourself about credit card best practices, such as making full, on-time payments and keeping your credit usage low (preferably below 30 percent of your total limits). 

What if your application is denied? 

First of all, don’t despair. Many people have been rejected for credit cards, and many have later been accepted for other cards. 

If you have no credit history at all — or you’ve had trouble getting approved for an unsecured credit card in the past — you might still get credit card from bank where you and your family have held accounts for many years. Based on the long-term relationship, you may be able to get at least a basic level credit card, which would help you initiate a credit history for yourself. 

Secondly, weigh your options. You might want to try applying for a different traditional card. You might also consider applying for a secured credit card, which requires a fixed deposit that becomes collateral for your account. 

However, be very selective about additional applications as each one may hurt your credit. 

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