Everybody now needs a credit card.

You will be amazed to know that to apply for a credit card these days is as simple as participating in one of those online surveys; entering your information and hitting “submit.” But getting approved is another business entirely. One that requires careful planning that should start long before you apply.

Are you trying to make your first credit card? Well, you have come to the right place. In this credit card 101, you will find out how you can go about having one made for yourself, and what your bank might require from you.

Also read: Most Rewarding Platinum Credit Card in Pakistan

First and foremost, here is what you must know:

1. Reduce your debt

Most of the time, people with bank loan history are denied credit cards. Make sure you have none before you proceed to apply for a credit card.

You are supposed to ensure that you have no debts before you apply. If you do, try to pay off your debts prior to the application process.

2. Don’t apply for the first offer you see

Falling for the first offer you find yourself or through some other source has its disadvantages. It does people good to compare between offers and the banks offering them.

In Pakistan, however, you can apply only where you have an active account. Even with this, there are more than one offers. We recommend talking this out with the bank people.

Let them help you out. They will know what is best suited to your needs.

3. Include all of your income in the application

Your income, and all of it, is an important aspect of this entire process. Credit card issuers will want to know your income level to compute your debt-to-income ratio, which in turn will aid them to determine your capability to pay.

If you have more than one employer, more than once source of earning money, like earning apart from your full-time job or the like, be sure to include all of it on your application so as to avoid future confusion.

Another thing of note, upon providing incorrect information, whether intentional or not, about your income might lead to credit card fraud. The only way out of this mess is to pay your way out.

Also read: 5 Tips To Save Money Using Your Credit Card!

Secondly, what you must present:

1. Identity Documents

Usually, they’ll want a CNIC with your photo, or your passport. Make sure that you present valid originals of these documents.

They should not be tattered or crumpled.  

2. Proof of Income

Your credit card issuer would need some proof income. This includes a salary slip, a letter from your employer, and your bank statement can testify to this. Anything that holds validity and proves that you have a constant, trustworthy source of income to pay off your credit card loans.

The documents being presented should be in their original form and not crumpled or folded.

3. Proof of debt if applying for balance transfer

This varies with your case. If you qualify for this one, make sure—again—that the credit card statement you provide is recent and not old, the document being neat and creaseless.

Also read:  6 Common Type of Credit Card Frauds and How to Avoid Them

4. Decide on a type

A credit card is categorized into Silver, Gold, Platinum categories. The names may differ from bank to bank. But their purpose is similar. Credit You need to choose your credit card based on your salary. If your amount doesn’t coincide with the policies of your chosen card and the minimum salary requirement, then your application will be rejected.

Make sure you choose your card appropriately with your salary.

5. Cards with higher credit limit

As per the rules and policies applied and abided by here in Pakistan, the limit your credit card can have can be three times that of your salary. For instance, if you earn 50 thousand rupees a month, then your limit can be three times of that amount, that is 150 thousand rupees. This is offered by the Gold Card.

The Silver Card offers a limit that is two times of your original salary.

9. Multiple cards and what you need to know

If you apply for more than one card with a number of banks, this reduces your chances of approval. This is usually restricted to cards with higher limits.

However, if you wish, you can apply for multiple cards with less limits to have a higher cumulative limit. Caution is advised in this case. One must know the total lending limit of each card to avoid trouble.

Information you need to put in your application form.

This depends upon your credit card issuer. But almost all of the following information is asked of you. Generally

• Full name
• Date of birth
• Residential address and status—status being either citizen, permanent resident, long-term visa, et cetera
• Contact details—this should include your email address, as well
• Number of dependents—dependents are your children
• Occupation
• Employer’s name and contact details
• Income per year—this shall include annual salary, bonuses or commissions, and secondary income et cetera
• Current balance of your savings and transactions accounts
• Current balance of other credit cards and other debts you already have
• Monthly expenses—this shall include rent, mortgage, groceries, fuel or public transport, utilities, insurance, and possibly more depending on your issuer
• Your preferred credit limit for the card—this one is usually optional
• Any other general information asked of you

Bottom Line and Conclusion. 

1. Being cautious

You need to be cautious when it comes to filling your application. One mistake, even if it is a minor one, can lead to your credit card application being denied. You need a clear head and possibly another person well-versed in finance or a relative having relevant experience with dealing with credit cards to help you fill your form.

2. Don’t give up

In case your application ends up being denied, there is room for consideration. This is practiced by a lot of credit card issuers. You can call them and talk it out. Plead your case and see how it goes.

Concluding, abide by the rules needed to get yourself approved the first time. Do not make haste, as this process will cost you time. Also, make sure to give accurate information during the application process so as to avoid denial.

If you go by the books, you will have your credit card assigned to you. There is always a second try if that doesn’t work out.

Khurram Zahid

The post Want your First Credit Card? These Requirements from Banks you Need to Know appeared first on Smartchoice.pk.

Apply for a Credit Card. Click here

Why should credit cards be used in the first place?

Here are some advantages of credit cards which show why you should use a credit card in the first place:

1. You do not have to count your cash before paying bills of any kind or check if you have enough of it or not.
2. It is also a safer way of carrying money; cash always attracts thieves and robbers especially in a high crime rate country like Pakistan.
3. For some, carrying cash itself seems a burden. Going to an ATM every now and then and filling wallets up with paper money can be very irritating.
4. Besides these obvious advantages of using credit cards, one also gets the favours that the credit card packages offer to the clients.

Related read: How to Enjoy your Credit Card without Going into Debt

Credit cards and their utilization in Pakistan:

People have only recently started using credit cards in Pakistan and mainly for shopping. People create multiple accounts and various credit cards that offer various services and use them according to their needs. If extra money from the bank is used up, the bank charges a certain amount of interest that one can pay later. This service was mainly devised for salaried people who have limited amount of money available. Credit cards offer emergency loan from the bank and people can return it as soon as they get their salary. This is the general trend of credit card usage in Pakistan.

The “How to’s” of a credit card:

• Use of credit cards is not for people who have very little self-control. If you cannot use your credit smartly then you may put yourself at a disadvantage.
• Keeping more than one accounts can be very helpful for if one account exceeds limit, the other credit card remains at your disposal.
• Keep note of the amount of money you spend on your credit card so that you may spend the money you can pay back.
• Pay your credit card bills on time to avoid unnecessary financial burden.
• Credit limit is the amount you set as limit on your credit card. Keep it low to make it easier to pay it back.
• Stay updated to your bank’s policies and the status of your credit card account.

Related read: 5 Tips To Save Money Using Your Credit Card!

What to look for when getting a credit card?

The comparison of the packages and policies offered by different banks is very important. Following are a few steps to help you choose a suitable credit card:

• Don’t stick to one bank, look for packages most convenient for you instead.
• Prioritize taking advantage of the offers that the packages hold, Credit cards are more than just replacement of money.
• Use a package that offers ever-ready customer care, maximum discount offers on a wide-variety of brands, feasible security plans and insurance policies. It should also help you pay for online shopping efficiently.
• Check if the package you chose allows you to take as much advantage out of it as possible with little miscellaneous financial burdens.  

Related read: Most Rewarding Platinum Credit Card in Pakistan

5 banks and their credit card packages and policies:

Following are the top five banks in Pakistan that offer credit cards along with the packages and policies they offer.

• Bank Alfalah:

Bank Alfalah offers Three kinds of cards, classic/gold card, titanium card and platinum card. The packages are all the same however, as we move from classic to platinum, the services get better and wider. These services include worldwide accessibility, reward points, instalment pays, CIP lounge access etc. it also offers a cheque book with up to 50% credit limit utility and chip based credit cards with extra security.

• Faysal bank:

Faysal bank offers five types of credit cards, world, platinum, titanium (platinum-gold combo), mc² (unique style and chip technology) and Airblue (travel friendly credit). Through Airblue, we can accumulate blue miles and redeem them for free tickets. Their world credit card is the most expensive and offers maximum luxuries all around the world.

• Standard Chartered:

They offer the Visa Platinum card, Mastercard Titanium credit card and Visa Gold card. Apart from these this bank offers Cash Back credit card and the easy credit card. The easy card has the lowest financial charge and global accessibility while the cashback card reduces monthly financial burdens.

• UBL

UBL offers three types of cards, UBL credit card, UBL PSO auto credit card, and UBL Visa Platinum. Platinum is the most expensive whereas UBL credit card is the cheapest. The PSO auto credit offers fuel saving from PSO specifically.

• HBL

Habib Bank Limited offers four types of credit cards i.e. fuel saver, green, gold and platinum. The fuel saver card has further sub-types, green and gold. It basically offers saving on fuel cost ‘reducing the burden of monthly fuel expense’. The features and benefits of the gold and green credit card are the same whereas the platinum credit card offers everything at a grander level, offering and receiving larger amounts.

Credit cards are one step ahead to the financial development within our country, keeping up with these developments will make us financially compatible with other nations.

Khurram Zahid

The post 5 Top Banks Offering Credit Cards in Pakistan appeared first on Smartchoice.pk.

Meet eCIB
But before you can avail any of these services, you have to apply for them and then you are subject to certain checks only after which you are granted a new credit card or a personal loan. This is exactly where Electronic Credit Investigation Beaurau or eCIB comes into play. eCIB is a regulatory authority set up by State Bank of Pakistan, SBP. What this authotity does is maintain a database of all creditors from all financial institutions in the country. For all banks and other financial institutions it is mandatory to upload creditor’s details including all negative as well as positive aspect of any creditor’s history such as late payments, clean history, settlements, defaults etc. Based on the information provided by the financial institute, the eCIB prepares a report known as eCIB report or more commonly credit report. This report however doesn’t contain any grading or rating.  The report also includes your personal information such as your CNIC number, address, date of birth, name and other relevant details.

How Does A Bank Use The eCIB Report?
Each bank has a different set of criterion to gauge whether an individual’s request for a personal loan or a new credit card should be approved. There are different threshold and risk levels that a bank might have. For e.g where one bank might choose to refuse your request on a single delayed payment, another one could’ve a risk level of upto 3 delayed payments in your credit history before you can be refused for a financial service’s approval. Also there are different things that are taken into consideration while offering you a specific amount of loan or a credit card with a certain credit limit. It could also be the status of your current due payments on other loans you might have taken or if you have one or more credit cards already then your outstanding amount could also be taken into consideration before issuing you a new one. For example, you took a loan of 70,000 for 1 year with a monthly repayment schedule  but failed to pay 3 installments on time within the monthly due date. These late payments along with the full history of your payment schedule will be mentioned in the eCIB report making it easier for banks to gauge if you can be allowed to borrow further money or not. On the other hand, it can also reflect your positive status of timely payments on previous financial borrowing services and approve your request. Smartchoice.pk offers multiple financial services where you can also apply for a new credit card.

What’s The Function Of eCIB Report?
The purpose that the eCIB report serves is that whenever any individual applies for a credit card or a personal loan of any kind, the financial institute that has to issue the desire credit card or loan, checks into the eCIB database for the relevant report and checks for a clean history. In the occurrence that the bank finds a clean history, the individual who has put up a request is issued the relevant financial service. However if the case turns out to be the opposite, then the financial institution offering the loan has a right to reject the request.

What Should Be Done To Maintain Clean eCIB Report?
It is extremely important to maintain a clean credit history so that your eCIB report turns out to be positive if you ever need to apply for a new credit card or personal loan. Failure to do so might render you unable to avail such financial services from any financial institute. To ensure that you’ve a clean credit history, you should always file your income tax, pay your loan installments on time as well as paying credit card bills within the grace period. Not only does it save you from monetary loss in the shape of fines, late payment charges etc. It also keeps your credit history healthy and open to future financial opportunities.

Khurram Zahid

The post How eCIB Report Can Affect Your Credit Card Or Loan Approval appeared first on Smartchoice.pk.