How to apply for a credit card: With a smartly used credit card, you will have timely access to any product or service that would not be otherwise possible. We explain how to apply for a credit card and get it approved in a few steps, whether it’s a necessity or a status symbol.
It is not so easy to apply for a credit card successfully, even though being approved is never guaranteed. Start by checking your credit score and choosing a card that fits your lifestyle and purposes.
It can be stressful to apply for a credit card and wait for approval or rejection.
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Apply for a credit card. First recommendations
Our first tip is to have confidence.
“When you apply for your first credit card, you are asking the issuer to give you a chance,” says credit educator
John Ulzheimer of the Ulzheimer Group.
What’s your advice as an expert? Keep your expectations realistic.
Building your credit or credit score is a long-term process, and it has to start at some point. You are unlikely to get a very high credit limit on your first card, and you may not even get a modest limit. If you find yourself in this situation, read this article about building credit from scratch.
Remember: you may not be “trustworthy” to apply for a credit card right now, but you can prepare for approval by taking proactive steps. Take proactive steps to get approved as soon as possible.
Steps to apply for a credit card
Here are the six steps to apply for a credit card:
#Number 1: Know your credit score
- You can determine which products to order based on your credit score and credit report. We learn how to get copies of our credit reports from the Consumer Financial Protection Bureau (CFPB).
- You may not want to apply for an elite credit card if you have a normal credit score. This is because the terms clearly state that only applicants with excellent credit will be approved.
- Review your report carefully. Your credit report, as the Consumer Financial Protection Bureau (CFPB) points out, may contain errors, such as old collection accounts that should be removed, and can prevent your application from being approved.
How can I correct an error on my credit report?
- There are many errors in credit reports, and how they will handle an error is dependent on the type of error report.
- There may be account-related errors. Incorrect personal information, such as an incorrect name, could be caused by a late payment of more than seven years.
#Number 2: Choose the right type of card
- It’s probably a smart idea to apply for an annual fee credit card if this is your first credit card application. I would prefer a low maintenance fee, or one without them and with a low interest rate.
- Multiple applications for the same card are not permitted. Usually, one card is sufficient to get you started. Having multiple due dates reduces the risk of trying to keep track of everything.
- You may want to consider applying for a secured credit card if you do not have a credit history or have had trouble getting credit in the past.
- Credit history can be initiated or rebuilt using a secured credit card, which requires a cash deposit equivalent to the requested credit limit.
- We also recommend you apply for a credit card issued by a chain of stores or a department store.
- As Julie Marie McDonough describes in “How to Make Your Credit Score Soar,” retail cards can be thought of as the “training wheels” of credit cards, as the issuers tend to be more accommodating about who qualifies for one.
However, departmental or retail credit cards have some disadvantages. It’s important to use them responsibly because of high interest rates, commissions, and slightly poor customer service .
#Number 3: Decide where to apply and open an account
- Already have an account with a bank or credit union?
- McConough suggests getting a credit card from the financial institution where you have your bank account because you have a history of using their products.
- This guideline has the endorsement of Andrew Fiebert, co-founder of the personal finance organization Listen Money Matters.
- The more you have managed your bank account responsibly, for example without overdrafts, the greater your chance of getting a credit card approved.
#Number 4: Verify your prequalification
- You can find out if you are pre-qualified for a credit card with some big banks like JP Morgan Chase, Bank of America, and Capital One .
- You have to put in some work to make it happen. Generally, you’ll need to submit a small form and your social security number.
- As with checking your credit, this initiates a process of cursory review or ” Soft Inquiry “, which has no effect on your credit score.
- If you receive a “prequalified” or “pre-approved” status, go for it! The lender has already met your requirements.
- Although you still must apply for the card, approval depends on other factors, such as your formal income, which you can prove.
- Prequalification is not a 100% guarantee of approval; keep that in mind.
#Number 5: Be prepared for a “full inquiry” into your credit history
- It usually triggers what is known as a ” detailed investigation ” or ” full inquiry ” on your credit report when you apply for a new credit card. Your credit history will generate a trace when this query is made.
- The term “full inquiry” generally refers to when a lender or credit card issuer reviews your credit report in order to make a lending decision.
- It’s possible to lower your credit score by a few points if you have several tough inquiries. This is especially true if you have quite a few in a short span of time. These inquiries can stay on your credit report for up to two years.
- A single tough investigation may not significantly damage your score, and over time the damage will dissipate or disappear.
#Number 6: Implement best practices for credit cards
- Congratulations if your card is approved!
- You can build your credit record and score over time by using a credit card. In any case, bear in mind that now you have it, it requires some maintenance and attention on your part.
- Find out how to use credit cards wisely. Making full or “total” payments on time and keeping your credit usage low, preferably under 30 percent of your total limit.
- Credit cards should be used responsibly, BBVA reminds us.
Credit card requirements
Banks and financial institutions have different requirements for applying for credit cards. Because of this, we recommend you review all your bank’s options before requesting one. Comparatively, we provide a list of the general parameters you should consider when processing it:
- Intended for all
- Employed
- Individual
- A pensioner
Consider that the requirements to apply for a credit card, demanded by financial institutions, are proof of your ability to pay. This is in addition to the liability associated with your credit.
If you use Compare, you can see all the credit cards available in the market. Our service makes it easier to choose a credit card.
When filling out a credit card application, what kind of information do you need?
Whether you apply for a credit card online or by mail, you’ll typically need to provide the following details.
- The name
- Direction
- Has that address been your home for a long time?
- Are you renting or owning your home?
- Nationality
- Of your home country
- Contact information
- Your date of birth
- Your social security number
- Your employment status
- Gross annual income
- Income sources
- Assets and financial statements
- Financial liabilities such as a monthly housing payment or other loan payments
There may be differences in application requirements between issuers.
Be prepared to have your credit score hit
Your credit reports are typically checked when you apply for a new credit card. This is known as a thorough credit check. In most cases, a financial institution checks your credit report when making a loan decision, such as a lender or credit card provider.
Your credit score can be lowered by a few points as a result of a hard credit check, which can stay on your report for up to two years. The good news is that a hard credit check may not affect your scores as much as you think, and that the impact usually fades over time.
Is it possible to improve your credit history?
Credit history is one of the most important requirements not only for obtaining a credit card, but also for obtaining financing, a loan for a car, and even a mortgage.
The best thing that you can do if you have a bad record with the Credit Bureau or Circle is to pay your overdue balances on time, pay more than the minimum, and limit your credit usage to prevent your debt level from increasing. Until your score improves, you can apply for a credit card and have a better chance of getting accepted.
What is the best way to gain credit experience?
The experience of using credit or financing can be acquired by signing up for services on credit, starting with the most simple and basic, such as a telephone plan or cable television service. Additionally, you may be able to apply for a credit card at the bank where you have your savings account.
When you build your credit experience, you should demonstrate that you are a good customer by paying on time and requesting credit based on your ability to pay.
What happens if your application is rejected?
Firstly, don’t despair.
Frequently, people have been rejected from a credit card application more than once, but they are later accepted by another card. You should therefore know how to apply for a credit card before you begin the process.
Second, consider your options.
Alternatively, you may want to apply for a standard unsecured credit card or a credit card with lower income requirements and benefits.
Additionally, you may want to apply for a secured credit card , which requires a cash deposit that serves as a guarantee for your credit limit.
Nevertheless, you should be selective about the additional requests, remember the “hard inquiries”, because a series of them in a short amount of time can negatively affect your credit.
What credit cards should I apply for?
If you opt for Capital One, here we show you the top 7 Capital One credit cards.
Instead, if you desire to apply for a credit card from Wells Fargo, Chase, or Bank of America, we leave you some articles that may be helpful:
What is the best credit card to apply for the first time at Wells Fargo?
Chase Secured Credit Card: Does It Exist?
Bank of America BankAmericard Credit Card
Bank of America Premium Rewards Credit Card
Bank of America Card Cash Rewards
As you can see above, credit cards offer a wide variety of features, so you can compare and choose the one that’s right for you. If you have any doubts feel free to comment.
