Can a Zero-Balance Account Get a Credit Card

Credit cards are witnessing their Aha moment in India, with reports confirming 100 million+ active cards as of February this year. The credit card market has seen a CAGR (compound annual growth rate) of 12% over the last four years. What is driving this trend? Lower entry barriers are one reason along with more dynamic rewards for card users, and co-branded products.

The convenience, credit score advantages, and attractive rewards are making credit cards more appealing to a bigger audience. Speaking of entry barriers, are there any obstacles for those with zero-balance digital savings accounts? That’s what we aim to uncover in this article. 

Zero Balance Accounts & Credit Cards- What’s the Equation? 

Zero-balance digital savings accounts are a popular choice for consumers since they come without minimum balance requirements (and zero charges/penalties in the bargain). Now the question arises whether such an account holder can get a credit card. The answer is yes, with a few caveats. 
What Banks Usually Offer: 

• Some allow outright credit card applications although you may have to open a zero balance account during the process.
• Some banks do not offer complimentary credit cards with zero-balance accounts. You can apply for credit cards separately based on your existing credit score and income. 
• A few also offer fixed deposit (FD)--linked credit cards for zero-balance digital savings account holders. In such cases, you can apply for credit cards from the mobile banking application of your financial institution once you’re done with the account formalities. 

Lifetime Free Cards & Limits 

Many banks offer lifetime free credit cards to these account holders, meaning you don’t have to pay any annual or joining charges. No income proof is necessary since you have to book a fixed deposit with a minimum amount (while applying for a credit card). Credit card limits are usually up to 80% of the FD amount, while banks have varying minimum credit limits. 

Technically speaking, it is thus possible to open a zero-balance digital savings account and apply for a credit card, provided you meet all the conditions. What if you want to apply for a credit card without a bank account? Here are some tips on this below. 

Getting a Credit Card Without a Bank Account 

Getting a credit card without opening any account is sometimes possible, provided you follow these tips. 

• Find individual financial institutions or credit card issuers who do not require bank accounts. 
• Some banks may also allow credit card applications separately without accounts, although your income proof and credit score are necessary. 
• Meet all the eligibility requirements of the credit card issuer, including age and residency proof. 
• Apply in person or online, depending on the process followed by the credit card company. There will be a processing period when the company will verify your documents and eligibility before issuing approval. 

With a zero-balance digital savings account or without any account, credit cards are still attainable, subject to some terms and conditions. UPI has now come into the picture in a big way across India with other financial instruments. Despite rapid market evolution, credit cards continue to be hugely popular in India across multiple age groups. What’s behind this? Let’s find out more below. 

What Explains the Enduring Appeal of Credit Cards in India? 

We’ve already mentioned some basic factors driving the timeless popularity of credit cards in the country. Let us examine them in more detail below. 

1. Rewards & Loyalty Programs-

Credit card holders often get several attractive loyalty programs and rewards that are not widely available. For example, there are cashback offers on spending in multiple categories with deals and discounts across both offline and online shopping platforms. 

Credit card issuers also take many other measures to build customer loyalty, such as airport lounge access, complimentary movie tickets, VIP memberships, shopping vouchers, and more. These rewards make credit cards a better value proposition than many other financial products. 

2. Technology-Driven Convenience-

Technology is at the forefront of the credit card revolution, from smooth online applications to convenient mobile app-based tracking. Many banks are also introducing digital credit cards with buy now and pay later features. Credit cards are more accessible to a wider section of consumers today, particularly with faster onboarding, underwriting, and processing methods (thanks to technology). 

3. Easy EMI Facilities- 

You can easily purchase an essential item or cover a financial emergency by paying for it with your credit card. If you cannot clear the amount by the due date, the issuer can convert it into a monthly EMI for maximum convenience. 

4. Discounts on Online Shopping Platforms- 

Another reason is the multiple attractive offers across leading e-commerce platforms. Credit cards are steadily becoming a preferred payment method due to these discounts, which explains their huge demand across age groups. 

Conclusion 
To sum up, you can get a credit card even if you’re a zero balance account holder, with a few conditions, as outlined above. Considering the convenience and advantages of a credit card, it does make sense to apply for one with a reputed financial institution.