Apply For A Credit Card And Get Approved- All You Must Know!
Are you thinking of applying for a credit card? Or are you searching for the correct credit card for your need?
Whatever the case, if a credit card is on your mind, you are at the correct place. A credit card is always helpful in a number of situations. Many people find it safer and more advantageous than debit cards.
There are lots of benefits that are generally associated with a credit card. For instance, when you purchase groceries or use your credit card for traveling, you may get to earn some rewards. Even if you do not use it, it is like passive money that you can use in times of emergency.
There are lots of different credit cards with different limits, offers, etc, and selecting the right credit card can be a tedious task. And if we talk about applying for a credit card, it is again a hefty process. This is especially the case when you do not know how and where to start.
When you apply for a credit card, the credit card company or the issue of the card requires some information from your end. This generally is basic information about you, your income sources, etc.
This general information can accelerate the process of approval of a credit card. But before you go forward to apply for a credit card, there are a number of things that you must know. We have tried to explicitly explain everything you must know about a credit card and its application process. So without missing out on anything, read this whole article carefully.
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How To Apply For A Credit Card And Increase The Chances Of Its Approval?
Below we have shared some points that will help you apply for a credit card and also will increase the chances of its approval.
1. Credit score
A credit score is a very integral entity for a credit card. It helps to find out what your creditworthiness is or how easy is it for you to repay the loan. There are three major bureaus for credit reporting- Experian, TransUnion, and Equifax.
Every 12 months, you can ask for a free copy of your credit report and credit score from each of these bureaus. For free credit reports, the sole federally authorized source is AnnualCreditReport.com. You can generate or ask for the free report from here.
Another method to check for your credit score is by checking if the bank you have an account with lets you access your VantageScore or FICO score. Also, if you already have a credit card then you can even ask the issuer about the same. It can be confirmed easily by checking the bank or issuer’s website or by contacting their customer support or checking their app(if any).
Your credit score is based on your credit report this is why you must check your report meticulously for any errors. If there is any, make sure you dispute it as soon as possible. An error on your report can decrease your chances of quick approval.
The scoring systems to define score ranges by VantageScore and FICO are given below.
|Excellent- 800-850||Excellent- 781-850|
|Very Good- 740-799||Good- 661-780|
|Good- 670-739||Fair- 601-660|
|Fair- 580-669||Poor- 500-600|
|Poor- 300-579||Very Poor- 300-499|
Applicants must fulfill the credit score requirements before getting their credit card approved. A poor credit score will not fetch an applicant a credit card. For instance, an applicant with a poor credit score will not be able to apply or get approved for a good to the excellent score card.
What can be done if an applicant does not have a credit score?
If you fall into this category then there are some credit cards that require no credit score or credit history. A secured credit card is one such example. Once you get these cards, they help you build your credit score so that later in the future, you can think of applying for and getting better credit cards.
1. Applicant’s needs
After finding out about the cards for which you can qualify on the basis of your credit score, the next step is to think about what you exactly need in a credit card. You can aim to get rewards or cashback or think about building your credit score. So let us move further to know more.
Things to consider when choosing a credit card
There are a number of terms and conditions attached to a credit card. It can be fees, interest rates, different benefits or offers, etc. But before blindly selecting just any credit card, you must check the following aspects.
- Annual Fees- Some cards come with an annual fee and an applicant must decide if this annual fee is worth paying or not. For instance, if you apply for a credit card with rewards, it may have an average annual fee ranging from $95-$550 per year. The part that you must consider here is that will you be able to earn enough rewards to balance the fee that you are paying?. You must think about it.
- Balance on the card- Think carefully if you want to pay for your purchases completely or wish to have a balance on your credit card. An interest rate on a card with a balance can be an important point to consider. Try to choose the cards with low-interest rates. Or, you can even choose the cards with 0% intro APR. But this offer is valid for a limited period only, generally, a few months.
- Rewards- Are you applying for a credit card for the rewards? If you fall into the category of good to an excellent score of credit, you can qualify for different cards that reward you for your purchases. Some of these rewards may include mile points, cash back, sign-up bonuses, shopping credit, travel perks, etc. To earn these rewards, you can go with your everyday purchases with a specific brand, grocery store, restaurant, or gas station. For your purchases, you will be rewarded as per the terms and conditions.
- Terms and conditions of a credit card – Before just applying for a credit card, it is imperative to know in detail its terms and conditions of it. Sometimes, there is an annual fee attached to a credit card, and sometimes there is an annual fee with rewards. Let’s try to understand some terms.
- Annual Fee– This is a yearly fee that the card issuer charges from the cardholder. For the new cardholders, this fee can be waived off by the issuer. Credit cards with perks like rewards generally have an annual fee. This basically starts ar %95 annually and can vary depending upon the card type.
APR- when you choose to take a balance on your credit card or make late payments, you will have to pay interest. This interest is the annual percentage rate or APR. These APRs are variable.
Balance Transfer- When you transfer debt from one account to another, it is a balance transfer.
Cash Advance- It is a loan that a cardholder takes against the limit of its credit card. This comes with transaction fees and a high APR.
Penalty Fees- When a cardholder pays for its bills late or exceeds the maximum credit card limit, or when the payment is returned, this fee is imposed.
Welcome Bonus- It is for the new cardholders as a welcome offer that may include cash backs or other rewards.
- Preapproval – Checking for preapproval before applying for a credit card can be helpful. However, there is no guarantee that you will get a credit card if you are preapproved.
- Repayment – Credit card has a huge responsibility for repayment. Late payments or delayed payments can lead you to pay up high-interest rates and penalty fees. Hence, think about paying your credit card bills completely and on time.
- Information – A credit card application requires a number of things that also include information about the cardholder. This ensures a smooth process of card application and approval. The following information must be known by the cardholder.
- Full name
- Date of birth
- Annual income
- Social security number
- Current employer or income source
- Partner’s income
Applying for a new credit card is always exciting but the application and approval process isn’t that easy. However, checking your credit report and credit score can help you to a great extent in this process.
Choosing the correct type of credit card as per your requirements is very important. If you are applying for a card with rewards, make sure you are able to earn the rewards and use them as well. Or else you will be paying high-interest rates for no good reason. Think carefully and apply for the cards that fit your needs.