A credit card helps the user spend on day-to-day activities, especially emergencies, without having to worry about their budget. Ironically, Indian banks are now only comfortable providing the service to those with a steady source of income.

Around 10 years ago, getting a credit card would have been way easier than now. These days, banks are rejecting credit card applications of salaried employees as well.

The stricter norms to avail one are partially due to the lenders' focus on dealing with their mounting non-performing assets (NPA).

If you are not already aware, NPAs are credit facilities that were given by the banks and the payments of dues in this regard have remained unpaid by the customers for a long time. The "asset" has stopped generating income for the lender. The performance and profits of the banks depend largely on controlling the default on advances they make.

While the NPAs in the recent past have mainly been in relation to corporate borrowers, lenders have been exercising control on the retail customers to avoid further downside.

RBI data shows that the total outstanding payments on credit cards have been increased to $44.21 million in December 2018 from $26.15 million in December 2008.

Despite the wide range of varieties in credit cards available, some even customizable, the possibility of getting your application rejected for one is highly likely.

Possible reasons for rejection

The basic idea behind the evaluation of your credibility is to evaluate whether or not you will be able to repay the money you borrow. If you are a businessman or involved in any kind self-employment, the chances of your application getting rejected are higher since you are a "high risk" individual to the bank with no steady source of income.

On receiving a request to avail credit card service, firstly, the bank will look at your credit report that will give them an understanding of your spending pattern. How regular are you in paying your other dues? Any defaults on loans taken in the past? Do you currently have a large loan that is underway? Or something as basic as- how punctual you have been with paying your utility bills? These factors determine your credit score and your financial discipline.

Your previous usage of credit card and the number of times you have maxed out of the credit limit is also considered. Despite an improvement in credit repayment, a past mistake could hurt for a long time and it may be a while before the score improves.

Another factor is your pursuit of credit. If your behavior comes off as 'credit hungry' or desperate to seek a loan or credit card, it will hurt your credit score. For example, if you have applied for a loan or credit card at too many places, it will look like you are too eager and with every application, your score will be lowered.

What can you do?

Study your previous financial activities. You have to prioritize your loan installments or dues to a bank or institution. Financial discipline comes with prioritizing debt over expenses.

If you are unable to seek a credit card anywhere, you can even get your credit report checked to understand the possible reasons that may have been denting your scores.