When you search for credit cards, you find a host of options that come with different features and benefits you can avail of. But, before submitting your application to apply for a credit card, you must weigh all the factors to make a wise decision. If you wish to get a higher credit limit, make sure to maintain a healthy credit score. Also, you will have to show a high stable income.
Most banks in India offer credit cards based on your needs and preferences. However, getting your new credit card from a bank comes with its advantages and disadvantages. When you apply for credit card, consider welcome bonuses, financing terms, rewards, etc.
How does getting a credit card from your bank work?
One of the perks of getting a credit card from your bank is that your application gets approved quickly. That is because you already have a financial relationship with the bank. If you have an existing customer, and your accounts are in good standing, it is more likely that your application for a new credit card will get approved.
Also, if you have always paid your bills and other fees on time, your bank will take that into account besides other factors to determine your eligibility. Your current relationship with the bank comes in handy if you do not have an excellent credit score. Depending on how creditworthy you are, your bank decides if you qualify for affordable interest rates, longer interest-free periods, and lower fees.
Pros of getting a credit card from your bank
Easy to apply
As a long-term customer of the bank, you will find it easier to apply for a credit card. You can apply online through your bank account or visit a nearby branch if you wish to talk to a representative. Visiting a bank branch may be a good idea as you have someone to the odds of being approved for a credit card.
Another benefit of having an account with the bank is that you can easily set up a new credit card to add to your online profile. The plus side is that you are already familiar with your net banking account or your bank’s app. You do not have to get used to anything new. You can process your monthly payments faster than creating a payment system with another firm.
The best alternative to a debit card
Your debit card is always linked to your bank account. When you withdraw money from your debit card, the amount gets dedicated from your bank account. But, with a credit card, the amount gets deducted from your credit limit. The benefit of having a credit card from your bank is that you have better fraud protection in the case of unauthorized transactions.
Avail of bonuses
Another benefit of having a healthy financial relationship with your bank is that you can avail yourself of higher benefits. Depending on the type of credit card you are applying for, you can get rewards and bonuses. You can potentially boost your reward rate by up to 50%, depending on your reward tier.
Cons of getting a credit card from your bank
Applying for a new credit card from your bank also comes with certain disadvantages, which are:
The disadvantage of getting a credit card from your bank is that you are cutting yourself from potential rewards and welcome offers offered by other credit card issuers. Not all banks provide the same credit cards with the same features. You can explore the market and find a credit card that best serves your needs and preferences.
A golden piece of advice would be to compare the welcome bonus you have been offered by your bank before you apply for a credit card. This way, you have the opportunity to get a better deal. Make sure to apply for a credit card by visiting the branch instead of following the offer that was mailed to you. It is advisable to compare your options before applying for a credit card.
No balance transfers
Another disadvantage of getting a credit card from your bank is that you cannot opt for a balance transfer credit. It means that if you have a pending outstanding balance coupled with hefty interest rates, you will have to find a credit card from another bank to transfer your outstanding balance.