A behind-the-scenes look at the credit application process, revealing the decisive criteria that will open the doors to greater financial autonomy. (Photo: Peru Retail)
In a world where electronic transactions and online financial management have become the norm, obtaining a credit card is almost a rite of passage towards financial autonomy. But what secrets are hidden behind the approval of this precious financial instrument? It’s not just a matter of wanting it; There are certain master keys that open the door to that world of credit possibilities. From demonstrating financial solvency to evidence of a clean debt history, the requirements to access a credit card can seem like a labyrinth of conditions and terms.
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However, there is more to this process than meets the eye. Beyond monthly income and age, there are hidden criteria that can be the difference between a refusal and access to credit. Could your place of residence influence the decision? Do they take into account other aspects of your financial life that you are not considering? In the following note, we will reveal everything you need to know about the credit card application process. Discover the essential requirements and the lesser-known secrets that determine whether you are considered suitable to access this important financial instrument
To obtain a credit card, it is generally necessary to meet the following requirements, although they may vary depending on the financial institution:
Age of majority: Most entities require that the applicant be of legal age, that is, 18 years or older.
Stable income: You must demonstrate that you have a source of regular income to ensure that you will be able to meet your monthly credit card payments. The minimum amount of income accepted may vary by institution.
Good credit history: A positive credit history suggests that you manage your debts responsibly. Financial institutions consult it to evaluate your solvency and reliability as a debtor.
Current ID: You will need official identification, such as a passport or national ID card, to prove your identity during the application process.
Proof of Address: Some entities may require recent proof of address (utility bill, bank statement, etc.) to verify your residential address.
In some cases, minimum credit score: Some credit cards require the applicant to have a specific credit score to be considered eligible.
Debt Capacity Assessment: In addition to stable income, financial institutions can evaluate your debt capacity, which considers your expenses, other debts, and financial responsibilities.
Credit cards. Photo: Infobae/Diffusion
A credit card is a versatile financial instrument that offers multiple benefits and functions for users. Here I present some of the main uses and advantages of having a credit card:
Financial flexibility: Allows you to make purchases or pay for services even when you do not have cash, providing a line of credit that can be used at any time.
Ease of payment: Offers the possibility of deferring payment for purchases made, usually without interest, if the total debt is settled by the indicated cut-off date.
Access to credit: For emergency situations or unforeseen expenses, a credit card can be a valuable resource by providing immediate access to additional funds.
Security: Compared to carrying cash, credit cards offer greater security, as if lost or stolen, they can be blocked immediately, and many offer fraud protection.
Building credit history: Responsible use of a credit card (on-time payments, proper credit limit management) can help build or improve credit history, essential for future applications for larger credits such as mortgage or vehicle loans.
Rewards and benefits: Many credit cards offer rewards programs, points, travel miles, discounts in stores and restaurants, as well as exclusive promotions for cardholders.
International purchases: They allow you to make purchases or contract services abroad or through the Internet, more easily and without the need to deal with currency exchange.
Financial management: They make it easy to track expenses through detailed account statements, helping users better manage their budget and personal finances.
It is important to use credit cards wisely, understanding the terms and conditions, being aware of the applicable interest rates, and avoiding over-indebtedness to maximize your benefits without incurring financial problems.
(Illustrative Image Infobae)
Improving your credit history is essential to access more favorable financial opportunities. To achieve this, follow these recommendations:
Pay on time: Meet the minimum payments on your credits and bills before the due date. Timely payments have a significant impact on your credit score.
Keep credit card balances low: Try not to use more than 30% of your available credit limit on each card. High balances compared to your credit limits can negatively affect your score.
Establish a long and solid credit history: Keep your old accounts open and active, as long as they do not represent a financial burden. Time is a key factor in your credit history.
Mix up your credit types: A healthy mix of different types of credit (credit cards, personal loans, auto loans, etc.) can improve your score. However, do not request credits that you do not need.
Limit new credit applications: Every time you apply for credit, an inquiry is made that can affect your score. If you need to apply for new credit, try to space out your applications.
Regulate your existing debts: Prioritize paying off debts with higher interest rates and consider debt consolidation strategies if necessary.
Check your credit report regularly: Request your credit report at least once a year and review its accuracy. Correct any errors you find, as they can negatively affect your score.
Use credit management tools: Some financial institutions offer monitoring and alert services that help keep tabs on your credit, which can be useful in detecting and preventing fraud.
Be consistent: Improving your credit history can take time. Be patient and consistent with your good financial practices.
By following these tips, you will not only improve your credit history, but you will also develop healthy financial habits that can benefit you throughout your life.
A young woman pays with her credit card in a store. (Getty)
2024-02-23 22:50:28
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