Credit Card

What is a credit card?

A credit card is a loan that is given by the bank but the monies are loaded to the card account and not a bank account. A credit card account is usually held in a credit card management system, which may be different from that of the core banking in kenya system.
Banks or Financial institutions subscribe to the owners of the  Credit card/s trademark. They are given the license to run the Credit card/s as per the association rules and regulations at set fees. Visa and MasterCard are examples of such associations. The associations facilitate the purchase and payments networks, so they work like clearing houses.

Credit cards may be chip or magnetic strip.

A chip card means that information of the account is held in a chip. A magnetic strip card is one where the information is held at the back of the card in a magnetic strip. As cards are migrated from magnetic to chip, the cards may have both features present in the plastic.

In some instatnces the credit cards are virtual cards meaning there is no physical card. These category of cards are maily used for internet and the details of the card account are what is availed to you.

Requirements for aplying  for a Credit card.

You can apply for a credit card by completing the application form. You will be required to furnish the bank with original documents that identify you, where you leave and sourse of income. Using the identification documents, the bank is able to chech on your credit worthiness. If the applicant has handled loans in a good way and makes timely repayments as required, then the credit worthiness is high, if on the other hand you have mishandled loans given to you, your credit score is low. When the credit score is low, the following actions may be taken against you by the Bank;

  • you may be denied the credit card facility,
  • Your application may be deferred until the score improves. Usually a time period is given for this,
  • Your application may be processed but the limit advanced is very low,
  • Finally, you may be asked to secure the credit card by placing a fixed deposit with the bank.

In conclusion, anyone can apply for a credit card but they have to show steady income that is due to them. It is easier for an employed person to access credit card facilities than a self employed person.


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