How To Apply for a Credit Card

Preparing for the process will boost your chances of getting approved

Woman using a credit card after filling out a credit application and being approved
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Credit cards can offer convenience for spending, along with the potential to earn valuable rewards or to enjoy travel benefits. Before applying for a credit card, it's helpful to research what it takes to qualify for approval and review your credit history. For those applying for a credit card for the first time, you may need to build your credit history first or accept a lower credit limit.

Key Takeaways

  • Credit cards can offer convenience for spending, along with the potential to earn valuable rewards or to enjoy travel benefits.
  • When applying for a credit card, whether you qualify for the card can depend on your income, credit history, and credit score.
  • If you're applying for a credit card for the first time and have no credit history, a secured credit card can help build your credit.
  • Before applying, consider the card's interest rate, annual fee, and benefits such as cash rewards, gas points, and travel miles.

Qualifying for a Credit Card

When applying for a credit card, it can be a challenge to determine whether you qualify for the card. When credit card companies issue credit cards, it's with the agreement that you'll repay what you charged. Your credit history found in your credit report tells credit card companies how likely you are to keep up with your financial obligations.

A good credit history suggests you're responsible when paying back what you've borrowed and whether you've paid on time. A poor credit history, on the other hand, may hint at the opposite.

Credit Score

As a rule of thumb, the better your credit history, the more likely you will be approved for a credit card. One way that creditors measure your ability to repay your debts is by reviewing your credit score, which is a numerical representation of your creditworthiness. In other words, a credit score is a number or rating that shows the probability that a person will make their loan payments on time and pay back their debts.

There are a couple of different credit scoring systems but one of the most commonly used is called the FICO score, which is named after the Fair Issac Corporation. Below are examples of the FICO score ranges that represent a borrower's creditworthiness.

FICO Score Ratings
FICO Score Rating
580 Poor
580-669 Fair
670-739 Good
740-799 Very Good
800+ Exceptional
Data obtained from the Fair Issac Corporation.

A higher credit score can increase the chances of getting approved for a credit card, auto loan, or home mortgage loan. Also, a higher credit score can result in a lower interest rate and a larger credit line for your credit card.

As a result, a good credit score can save borrowers hundreds or thousands of dollars in interest costs over the long term, particularly since credit card companies often charge high-interest rates of 15% to 25%. If you're young and your credit score isn't very high yet, you may be charged a high-interest rate at the onset.

Little or No Credit History

If you're applying for a credit card for the first time or you have no credit history, it can be challenging to get approved for a major credit card. However, there are options to help build your credit history. Many credit card companies offer a secured credit card in which an amount is held on deposit with the credit card issuer to secure the credit limit of the card.

For example, a $300 secured credit card would allow for a $300 card limit, but $300 would be transferred to the card issuer to be held as collateral. The credit card company wouldn't have any risk since the cash could be used to pay off the balance in the case of nonpayment. As a result, secured credit cards can be easier to get approved or become eligible for a new or first-time credit card.

Secure credit cards are a great way to build credit history and show that you can make your payments on time. Also, a secured credit card can be helpful when traveling, booking a hotel room, or renting a car since a credit card is often necessary to hold a reservation. Once you have a solid credit history and a good credit score, you can apply for an unsecured credit card.

The 2009 CARD Act requires you to be at least 21 to apply for a credit card unless you're at least 18 and have proof of income.

Comparing Credit Card Options

Shopping around can help you find the credit card that's best suited to both your spending needs and habits, as well as your credit profile.

When evaluating cards, start with the features and benefits. Specifically, ask yourself what you're looking for from a card. For example, if you're looking for rewards, you'll need to consider what type of rewards you want to earn, such as cash back, travel miles, or points.

If it's likely that you'll carry a credit card balance, be mindful of the interest rate on the card. Also, compare the interest rates for the various types of transactions on the card, including purchases, balance transfers, or cash advances. If a card offers a 0% introductory promotional rate on purchases or balance transfers, consider how long the promotional period lasts and what the regular variable interest rate reverts to once the introductory period has ended.

Always look closely at fees. The most prominent fees to consider include the annual fee, if any; the balance transfer fee if you're planning to transfer a balance; and the foreign transaction fee if you’re planning to travel overseas.

Once you have an idea of what type of card you're looking for, consider how likely you are to qualify for it, based on your credit history. Credit card companies usually don't specify a minimum credit score that's needed to qualify, but they may indicate which cards are designed for fair credit, good credit, or excellent credit. If you've checked your credit score, you can use that as a guide for choosing a card.

How To Apply for a Credit Card

There are multiple ways to complete a credit card application: online, using a paper application, or by phone.

Applying for a credit card online is convenient and you can get a decision almost immediately. Whether you apply online, by phone, or by mail with a paper form, the information you'll need to supply is the same.

Personal Information

First, you'll need to tell the credit card company a little about yourself. The application will likely ask for:

  • Your name
  • Date of birth
  • Social Security number
  • Physical address and email address
  • Phone number
  • Mother's maiden name

This information is used to verify your identity and make sure the credit card company has a way to contact you.

Income Information

Next, you'll be asked about your annual household income. This is your gross annual income. You'll also need to tell the credit card company where this income comes from (i.e., employment, self-employment, or unemployment benefits). You may have the option to choose "Other" if your income doesn't come from any of those sources. For example, if you receive alimony, child support, disability benefits, or veterans' benefits, all of that could be used as income sources for a credit card application.

Housing Costs and Status

Credit card issuers are also curious about what you spend on housing each month and whether you rent or own. There may be a section on the application where you indicate whether you rent or own, how much you pay for rent or mortgage payments each month, and how long you've lived there.

Authorized Users

If you'd like to add an authorized user to your account, you may have the opportunity to do that when you apply for a credit card. To add an authorized user, you'll need to fill in their name, address, and date of birth.

Once you've completed these fields on the application, you can submit it to the credit card company. Again, if you're doing this online, you should be able to get a decision within a few minutes. If you're mailing in an application, it could take several weeks to get a response.

Each new application for credit results in a hard inquiry on your credit report, which can trim a few points off your credit score.

What If You Apply for a Credit Card and Are Denied?

If you are not able to get approved for a credit card on your first try, credit card companies are required to notify you in writing citing the reasons for denying credit. When explaining a denial, you're also entitled to know which credit bureau supplied the credit report that was used in the decision. You can then reach out to that credit bureau to get a free copy of your credit report.

Once you get your report, review it carefully to look for any errors or inaccuracies that could negatively affect your credit. If the denial is due to negative but accurate credit remarks, or you don't have a lengthy credit history, you could ask the credit card company to reconsider. If they deny your request, you can focus on improving your credit to raise your odds of approval the next time.

Frequently Asked Questions

How To Apply for a Credit Card?

Applicants can apply for a credit card online with the card issuer but to qualify, you'll often need proof of income, a good credit score, and a solid credit history.

How Do I Qualify for Credit Card with No Credit History?

If you're applying for a credit card for the first time and have no credit history, a secured credit card can help in which a cash amount is held with the card issuer as collateral. The credit limit usually matches the amount held. Secured credit cards can help build your credit history and boost your credit score.

What Should I Consider When Choosing a Credit Card?

It's important to consider what you want from your credit card, such as cash rewards, gas points, and travel rewards. Also, consider the annual fee, interest rate, and monthly payment to be sure you can afford the amount you're considering borrowing.

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