Whether purchasing a costly product or shopping for daily needs, credit card payment is the option people prefer over cash payment in this digital world. As it is super easy to pay in-person or online without cash, credit cards have become increasingly popular. Using credit cards has many advantages, such as safety from fraudulency, additional reward points and cashback offers for purchases, and more. When responsibly used, credit cards will help you in many ways and give you peace of mind.

Another perk of using credit cards is that they help you build your CIBIL credit score, the key checkpoint used by banks, lenders, and financial institutions to decide your creditworthiness. At the same time, you apply for credit-based products like loans or credit cards. Sounds interesting, right? Credit cards help build a good credit score, but you must have a good credit score to avail of a credit card. Then, how can you get your first credit card?

You can avail of a few types of credit cards without cibil score even when you suffer from a bad CIBIL score, but they come with certain constraints. Though different lenders consider different score value limits for making decisions on approving credit cards, a score of 650 and above is usually considered good.

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Credit Cards for Low Credit Score in India

A low score may be due to an unknown financial mistake, or maybe you are new to credit products. Whatever the reason, building your credit score using the above-mentioned steps is not possible in a single day and takes some time. What if you need a credit card to meet your financial needs in such a situation?

Here is a list of credit cards for low credit score in India:

Secured Credit Cards

Secured credit cards are a great start for new credit seekers, especially if your main aim is to build a decent credit score. In this case, you will have to deposit a small sum to the bank, which will be considered collateral for the credit amount. Though you are depositing an amount to get a credit card with the same credit limit, it is worth doing it as it will eventually build your credit score, which in turn will make you future-ready for easy approval of loans or higher limit credit cards without deposit. To top it all, you will be getting interest for the amount you have deposited and will get that amount back when you are eligible for an unsecured credit card.

Make sure you pay the bills on time and avoid using the full credit limit because payment history and credit utilisation ratio are the two most important factors in the CIBIL score calculation formula. Also, if you promptly pay your bills, the chance of getting approval for higher credit limits than your deposit amount will be higher.

Read More:: Best Credit Card for Beginners

Downside:

1. You will need some amount to begin with.

2. You will only get a credit limit equivalent to the amount deposited.

Credit Cards from your Primary Bank

If you have been a bank customer for years, you have a higher chance of getting a new credit card from your primary bank, even if your CIBIL score is low. Since your primary bank already knows about your financial activities, there is a higher chance of getting your credit card application approved. Get one, use it to meet your financial needs, and pay the bills regularly. Once your credit score has been raised to a safer limit, you can opt to upgrade to higher limits.

Downside:

1. Banks will approve your credit card only if you are their long-term customer and hold a record of good financial activities.

2. You may be approved for lower credit limits.

Co-signed Credit Cards

If you have a close friend or relative with a good CIBIL score and love to see you in good financial status, here is good news for you. Banks will be ready to approve credit cards for you even with a low CIBIL score when you have a co-signer, as the risk factor from their side is less.

Co-signing doesn’t mean that both of you can access the credit account. Instead, they will be held responsible if the primary account holder defaults on any payments. If you are younger and want to start your credit journey, then your parents or guardian may be the best option to serve as a co-signer.

Downside:

1. You need someone who believes in and supports you in your financial activities.

2. The person who co-signs should have a good CIBIL score.

3. The co-signer should be 21 years or above.

4. In case of defaults, your relationship with the co-signer will be damaged.

Joint Credit Cards

This credit card is a great option if your partner or parent who shares your financial responsibility has a good credit score. In such cases, you can apply for joint credit cards, where both of you will be considered primary account holders. Both can access the credit card and are held responsible for paying the bills.

Read More:: What is the minimum credit score needed for a credit card?

Downside:

1. Since both share the card, this card is only suitable for partners who share financial responsibility.

High Fee Unsecured Credit Cards

If you are not fortunate enough to have some amount to avail of a secured card or have no one who can help you get a co-signed card, no worries. Doors are still open for you but with some additional charges. You can opt for unsecured credit cards even with a low CIBIL score. But banks may charge you higher fees and annual charges. Upon reaching a good CIBIL score limit, remember to opt for your most suitable credit card as early as possible to avoid further money loss in terms of fees.

Downside:

1. You will have to pay additional maintenance fees and annual or monthly charges.

2. Interest rates will be high.

3. Credit limits will be low.

Credit Cards from Small Banks

Usually, banks approve credit card applications based on credit score as they have strict rules and regulations regarding the approval process. However, smaller banks may consider your income, employment status, and other financial possibilities when approving credit cards. You can visit such banks and check your credit card eligibility.

Downside

1. You may be eligible for smaller credits.

2. Not all banks offer you credit cards.

Read More:: Minimum CIBIL Score Required for Credit Cards

Tips to choose credit cards

While availing of credit cards with good CIBIL scores is a breeze, getting one with low CIBIL scores is challenging. That doesn't mean you should blindly accept the one that has an easy approval process. There are a few things to consider before choosing the right credit card, especially when you have a low CIBIL score, and your goal is to achieve a healthy credit score.

1. When choosing credit cards, make sure that these lenders report to all the credit bureaus. Otherwise, you will lose the purpose of opting for a credit card to build your credit score. If the lender is just reporting to any one credit bureau, then your credit score of that particular credit bureau will improve while other credit scores still stay low. Note that lenders and banks will look for particular credit scores based on their policies to make decisions for loan approval.

2. Credit cards for low CIBIL scores may not have attractive features and options like unsecured credit cards. But there can be cashback and rewards. Look for cards that offer you the best features and options.

3. Annual charges are unavoidable if you opt for an unsecured credit card with a low CIBIL score. However, you can still choose the credit card with the lowest annual fees. Remember to look for hidden charges and confirm with your bank about all the charges that can come your way.

4. If you are a frequent traveller who travels to foreign countries, analyse the foreign transaction charges and limits.

5. Look for credit cards that have upgrade opportunities.

Read More:: Credit Card Against Fixed Deposit

Low CIBIL Score and NO CIBIL Score

If you have no credit history, that is, if you are new to credit and have never opted for any loans or credit cards, then the credit bureau will have no records about you, and you may get a zero credit score. On the other hand, if you have made any financial mistake like delayed payment, someone for whom you co-signed a loan missed paying that loan, or your credit utilisation is high, your credit score would have gone low.

If you have no or a low CIBIL score, banks and lenders may have no proof to believe that you will repay the amount and hence may reject your loan or credit card applications. Banks rely on customers' credit scores to decide whether or not to approve credit products and set safe credit limits.

Building CIBIL Score

The CIBIL score is not your lifetime score. The lenders and banks submit your financial activities to credit bureaus now and then, mostly for every month or forty-five days. Your credit score will improve or fall according to your past as well as recent credit activities. You can follow a few steps to build up your CIBIL score.

1. Avoid late payments and missed payments, as both will drastically lower your CIBIL score.

2. You should maintain a healthy Credit Utilisation Ratio by using only a maximum of 30% of your credit limit.

3. Keep your older credit accounts active so credit bureaus have sufficient data to calculate your score.

4. Avoid applying for multiple credit products simultaneously. Doing so will be reflected in your credit report as hard inquiries, which are signs that you are under a financial burden.

Conclusion

Credit cards have become part of our daily needs. While some portion of the population consider credit card usage as dangerous as you may fall into debt, credit cards, when responsibly used, are a way to stay safe during financial emergencies. Availing credit cards without cibil score can be difficult as a newbie as your CIBIL score will be NA or very low. However, you can opt for special credit cards to responsibly handle financial burdens and to build up your credit score.

Read More:: What is the best CIBIL Score

FAQs

Why is my bank not approving higher credit limits for me?

Banks will check your credit score to analyse your financial responsibility to approve your credit card application. They will approve credit cards with credit limits that they think you will be able to pay back without fail.

While applying for co-signed credit cards, whose credit score will be considered?

Both of your credit scores will be considered, and if the lender's evaluation is satisfactory, your credit card application will be approved.

In co-signed credit cards, whose credit score is affected in case of default or late payments?

Both of your credit scores will be affected. So make sure to pay bills promptly.

What is the difference between co-signed and joint credit cards?

Your credit scores in co-signed and joint credit cards will be considered while evaluating your application. Hence, if any one of you has a good CIBIL score, then there is a chance you will get your loan approved. However, the co-signer cannot access the account in co-signed cards but will be responsible if the payment is not made on time. On the other hand, with joint credit cards, both account holders will have equal access to the card and equal responsibility to repay the bills.

Even after years of using a credit card, my CIBIL score is still low. Why is that?

Banks and lenders will have a set of rules under which they report the financial activities of their customers to one or all of the credit bureaus. If the bank that has offered you the credit card doesn't report to Credit Information Bureau (India) Limited, then your credit report and, therefore, your CIBIL credit score will stay unaffected both in positive and negative ways.