Look at John 3:36, "He that believeth on the Son hath everlasting life: and he that believeth not the Son shall not see life; but the wrath of God abideth on him." Let's break that down now.
"He that believeth on the Son," means that we first had to hear about the Son in the first place. Then hearing the truth about Jesus being the Saviour of the whole world, we must decide on our own to believe on him. That requires "applying" faith and trust in him to actually save us. Then knowing that he did save us from our sins, we simply believe in our heart (Romans 10:9) that he did this and we will be saved! This is how we gain everlasting life; by believing in Jesus the Christ to save us from our sins, for we cannot do it ourselves!
Now, the same is true for if we do NOT believe in Jesus. "...and he that believeth not the Son shall not see life; but the wrath of God abideth on him." In order NOT to believe in him, we have to choose not to. You have to decide for yourself to reject him permanently causing God's wrath to remain on you!
This is applied faith! You apply belief in Jesus as your Saviour, you know who you are believing in and for what reason! Here is another great example of this. Go to John 20:29. Jesus had just appeared to Thomas to prove to him that he was resurrected and very real. "Jesus saith unto him, Thomas, because thou hast seen me, thou hast believed: blessed are they that have NOT seen, and yet have believed."
Not only did Thomas see and touch Jesus, he fully believed in him because he could see and touch him. On top of that, those who would come to believe in Jesus, though they never saw him, were blessed! So those are some examples of applied faith.
What about blind faith you ask? Well, it simply means not knowing what to believe or who to believe in. Catholicism has this problem down pat. Lay Catholics can only believe what the priests tell them, which of course is NOT the truth of God's Word. There are so many false teachings in that Church that one never knows what to believe and the Vatican keeps adopting new doctrines and adding "new" mysteries to the Rosary, one of the most diabolical aspects of Catholicism.
Ask a Catholic what he believes in and you will hard-pressed to get a solid answer. It is very sad to be so tangled up in any religion built on man-made rituals and guidelines that one can never know if they will go to heaven for sure. Jesus came to free people from religion to call them into a personal relationship with him by a simple act of faith. When you have rules and instructions you are to follow, that is not true faith that is eventually just going through the motions.
Why be in a religious rut when you can be free in Jesus Christ? He shed his precious blood for a reason! When you get saved in Christ, you are saved OUT of whatever religion you are in. If you are a Catholic and you hear the truth about Jesus and receive him as your personal Saviour by faith alone, you are then NO LONGER a Catholic! Same for Mormons, Jehovah's Witnesses, Muslims. You are then a born again believer in Jesus Christ!
Applied faith is reaching out and trusting and taking. Blind faith is reaching out and being led along by the blind! Jesus talked about this in the Gospels. Look at Matthew 15:14. Jesus had just talked about what defiles men and says this about the Pharisees, the religious leaders, "...they be blind leaders of the blind. And if the blind lead the blind, both shall fall into the ditch."
Don't be led around by blind guides or leaders believers! Abide in the truth of Christ and you will prevail!