The Self-Employed Guide to Credit Card Acquisition

As beneficial as being self-employed can be, it comes with its own challenges, such as being unable to manage finances. Credit cards for the self-employed can be a lifesaver. If you’re wondering how to apply for a credit card and qualify for one, this is just the guide for you!

In this blog, we will share the eligibility criteria, required documents, and the procedure to apply for a credit card for self-employed individuals.

What Are the Eligibility Criteria for Getting a Credit Card?

^{You must first meet the following requirements before applying for a credit card:} 

• You must have a credit score of 750 or above
• Minimum annual income varies depending on the credit card issuer
• Good repayment record

How to Apply for a Credit Card if Self-Employed?

If you meet the eligibility criteria listed above, follow these steps to apply for a credit card for self-employed individuals:

1. Visit the website of the credit card issuer. You could also do this offline by visiting the branch.
2. Fill out the application form. It should contain information about your business, income, and financial status. The information should be accurate and verifiable. Attach all the necessary documents.
3. The credit card issuer will review your application once you submit the form. If more information is required, they will contact you and ask for supporting documentation.

What Are the Required Documents?

You may need to submit financial documents such as the following:

• ID proofs such as Aadhaar and PAN
• Passport-sized photos
• Address proof
• Income proof
• Proof of business
• Past income tax returns
• Bank statement

Key Things to Keep in Mind While Selecting Credit Card

Now that you know how to apply for a credit card as a self-employed individual, keep the following points in mind to make sure you get the best credit card:

• When you go to cancel your credit card, some financial institutions may impose a hefty fee, so it is recommended to have a good reason to close your card.
• Cards with a low/zero joining fee can help you save money.
• It is recommended to maintain a low credit utilisation ratio. Your credit card limit impacts your credit utilisation ratio (the percentage of the credit you use).
• You are subject to pay a late fee if you fail to pay the bill on time, so make timely payments.

Conclusion

Self-employed individuals already go through plenty of financial pressure, especially with the current state of our economy. Nevertheless, having a credit card handy can help alleviate some of that, letting them prepare better finances for the future.

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Frequently Asked Questions

1. Why should I apply for a credit card?

Here are the top three benefits of having a credit card:

• You can easily track and optimise your spending patterns and categories.
• You could enjoy other perks on travel, online shopping, dining, fuel, etc.
• Credit cards are a perfect opportunity to build your credit score and improve your chances of getting loans in future.

2. How can I improve my chance of getting approved for a credit card?

You can improve your chances of getting approved for a credit card by following these three tips:

• Pay off balances and keep your credit utilisation below 30%.
• Review your credit report for any errors that may lower your score.
• Compare features, fees, interest rates, and eligibility criteria of different credit cards before applying.