There are two methods of getting a credit card in India for people with no credit history. Applicants in this category are mostly housewives or young students who have not taken any loan or EMI in their own name yet. This method is also valid for people with low credit score (CIBIL/Experian/Others).
The first way is to create a fixed deposit of ₹10,000 at a bank, preferably ICICI, Axis or HDFC Bank and take a card against that. This is the way I used when I was in college and wanted to build my credit score.
The second way is to get onboarded as a co-applicant in the credit card application of your parents or spouse. Siblings can also join their earning brother or sisters. However, in this method make sure that your add-on card number is unique and is indeed in your name, otherwise you will not improve your credit score.
Credit Card Against Fixed Deposits
This is the most common and easiest way to get a credit card for new users. Any scheduled commercial bank like ICICI, HDFC or Axis offers credit cards against a fixed deposit. Such cards have limits upto 90% of the fixed deposit value.
For example, I created a fixed deposit of ₹35,000 and got a card limit of ₹31,500 on my first credit card back in 2015.
Note: I suggest these banks for initial buyers because their cards offer great discount on ecommerce sites on Amazon and Flipkart. If you spend it wisely, you can easily build a good credit score and sooner or later, these banks will offer you cards without fixed deposits. Also, my own experience with them says that the customer service experience is a lot better than other banks.
Alternatively, you can also try for a SBI Credit Card which also offers a great customer experience along with deep discounts on ecommerce platforms.
Add-on Card
Although most cards in India are single applicant cards, meaning they are issued to only single individuals, there are a few cards tahat are issued to co-applicants as an add-on card to the main applicant.
Below are two case studies for add-on cards based on a real life interaction of mine with ICICI Bank and HDFC Bank representatives.
Case Study 1: ICICI HPCL Coral Credit Card
ICICI Bank is one of the few banks that offers co-applicant cards. My last interaction with them on call was on a HPCL Co-Branded Coral Credit Card where I came to know that for anyone with a monthly earning of ₹20,000 or more was offered a card. Further, the applicant can also add a family member such as spouse or son with that credit card.
Please note that you need to confirm that the second add-on card will be in your own name and not in the first applicant name. You can verify this by asking whether the two card numbers be different.
Case Study 2: HDFC Bank Moneyback Credit Card
HDFC Bank also offers add-on cards but I failed to ask whether the add-on card will be a different one. As a result, the second add-on card that I got along with my father’s credit card bore the same card number. Upon asking I got to know that the add on card was just a namesake and both cards were identical copies of each other.
Why Credit Cards are not issued to New Borrowers?
Credit Cards are often only issued to borrowers with an established credit history because they are unsecured debt and often have high interest rates associated with them (upto 42% per annum). So, if borrowers are unable to pay the debt, then the funds are lost forever for the bank.
Also, new borrowers, often driven by impulse, are forgetful of the way credit card debt builds even if they are fully aware of the charges and payments that are to be made on the card. I too fell victim to impulse buying during my first credit card during my early adult years.
Disclaimer: Das Credit provides information for educational purposes and does not endorse any financial company, asset or form of credit. Readers are advised to consult their financial advisor before taking any decision.
