What is the meaning of Credit Card Appraisal?

Credit card appraisal refers to the process through which credit card issuers evaluate your creditworthiness and determine various aspects of your credit card account. This evaluation helps them decide on your credit limit, interest rates, and other terms associated with your credit card usage. That’s why you must understand credit card appraisal as with this you can easily manage your finances effectively and also maximise the benefits of your credit card.

A Bit About Credit Card Appraisal

Credit card appraisal involves the evaluation of several factors by the credit card issuer to assess the risk associated with extending credit to you. These factors usually include your credit score, income level, employment status, credit history, and existing debts. Based on this assessment, the issuer determines your credit limit, interest rates for purchases and cash advances, and other terms such as fees and rewards eligibility.

Key Factors Evaluated in Credit Card Appraisal

Here are the major factors which are evaluated in credit card appraisal:

Credit Score

This numerical representation of your creditworthiness plays a significant role. Higher scores indicate lower credit risk, potentially leading to better terms.

Income Level

Your income helps issuers gauge your ability to repay debts. Higher incomes may qualify you for higher credit limits.

Credit History

A record of how responsibly you have managed credit in the past influences the terms offered. A good history often leads to more favourable terms.

Employment Status

Stable employment can bolster your application by demonstrating financial stability and repayment capability.

Process of Credit Card Appraisal

When you apply for a credit card, the issuer initiates the appraisal process:

1. Application Submission: You provide personal information and consent to a credit check.
2. Credit Check: The issuer checks your credit report and score from major credit bureaus.
3. Evaluation: Based on your credit profile, income, and other factors, the issuer decides on credit terms.
4. Decision: You receive approval or denial, often with details on credit limits, interest rates, and fees.

Also Read: 5 Ways to Make The Most of Your Credit Card

Airtel Credit Card Overview

Airtel credit cards provide various benefits such as:

• Huge Savings: You can save up to ₹16,000 annually.
• Credit Limit: Get a good credit limit of up to ₹5 lakhs.
• Customised Rewards and Cashbacks: Earn rewards as per your Airtel services usage and get up to 25% cashback on Airtel bills, recharges, and more.
• Digital Convenience: Manage your credit card through the Airtel Thanks app, as the process is 100% digital.
• Relaxed Eligibility: The age criteria to apply for an Airtel credit card is between 18-70 years old.
• Competitive Terms: Enjoy competitive interest rates for as low as 11.5% and fees, depending on your creditworthiness and usage patterns.

Importance of Credit Card Appraisal

Understanding credit card appraisal helps you:

• Secure Favorable Terms: Higher credit limits and lower interest rates can save you money.
• Manage Finances: Align credit usage with your financial capabilities to avoid debt traps.
• Build Credit: Responsible use enhances your credit profile, opening doors to better financial products in the future.

Conclusion

So, credit card appraisal is a vital process that determines the terms of your credit card account based on your financial history and current circumstances. If you understand the process, you can make the right decisions about credit card usage, manage your finances effectively, and leverage credit to achieve your financial goals.

Also Read: How Many Credit Cards Should You Have?

FAQs

Can credit card issuers change my credit limit after the initial appraisal?

Yes, credit card issuers can adjust your credit limit based on your credit usage, payment history, and overall creditworthiness.

What should I do if my credit card application is denied after appraisal?

You can request a free copy of your credit report to review factors that may have led to the denial and work on improving them before reapplying.

Does credit card appraisal affect my credit score?

Yes, each credit card application triggers a hard inquiry on your credit report, which can temporarily lower your credit score by a few points.

Can I negotiate the terms offered during credit card appraisal?

In some cases, especially if you have a strong credit history or a long-standing relationship with the issuer, you may negotiate for better terms.

How often should I review my credit card terms after the initial appraisal?

It’s wise to review your credit card terms annually or when significant changes in your financial situation occur to ensure they still meet your needs.