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How to Apply for a Credit Card: 6 Best Tips

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updated: June 16, 2024

Getting a new credit card provides an opportunity to earn rewards, redeem benefits, and take advantage of interest-rate promotions. The best credit cards for your situation depend on what your goals are, how much you spend each month, and what you spend it on. Here’s all you need to know about how to go about applying for a credit card.

Check your credit reports and fix any errors

A study by the Federal Trade Commission found that 25% of Americans have errors on their credit reports that may affect their credit score. Before applying for a credit card, obtain a copy of your credit reports and check for errors. You can get a free copy of your report from each of the three major credit bureaus—Experian, Equifax, and TransUnion—at AnnualCreditReport.com.

If there are any errors, dispute them with the credit bureaus online or through the mail to update your credit. The creditor has a minimum of 30 days to respond to your request. If the creditor fails to respond in time—or cannot provide evidence of the negative mark on your credit—the bureaus will delete it.

Determine what kind of credit card you want

There are many different types of credit cards to match the needs of consumers and small-business owners. Credit cards may offer rewards, a welcome bonus, a 0% intro annual percentage rate (APR) offer, and other features. The features package will differ among cards. You need to determine which features are most important to you, so you can narrow down the choices.

Cards tend to specialize in certain kinds of features. Here are some examples.

  • Rewards credit cards. These are best for people who pay off their balances in full each month.
  • Airline and hotel credit cards. These include exclusive benefits when flying the airline or staying at one of its hotels. Generally, it’s best to get the credit card of the airline and hotel you use the most. Benefits can include first checked bag free, priority boarding, and inflight discounts.
  • 0% intro APR credit cards. These offer interest-free financing on balance transfers and purchases.
  • Secured credit cards. These help people build credit so they can qualify for cards with better terms, interest rates, and benefits. The Discover it Secured card earns cash back rewards and provides automatic reviews for potential upgrades starting at seven months.
  • Small-business credit cards. These allow business owners to keep their business expenses separate from their personal cards and may offer any of the features listed above. The Ink Business Unlimited earns unlimited 1.5% cash back, and employee cards are available at no extra charge.
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Check prequalified and preapproved offers

Many banks allow people to check for prequalified or preapproved offers without formally applying. To check for these offers, simply provide your name and the last four digits of your Social Security number.

When you submit your information, it will be a soft credit inquiry, which does not affect your credit score. Additionally, other lenders will not see the inquiry, so it won’t affect your ability to get approved at another bank. Prequalified and preapproved offers are the best credit card offers for which you’re eligible based on your credit score.

If you decide to apply for one of these offers and submit an application, it may trigger a hard credit inquiry. Each hard inquiry may lower your credit score by up to five points for approximately six to 12 months. Hard inquiries fall off your credit report after 24 months.

Apply for the best credit cards that match your credit profile

When comparing credit cards, focus on those that are available for your credit score. Although there are many appealing credit cards, it doesn’t make sense to apply for those that require a higher score than yours.

Applying for a card that matches your credit profile allows you to gain access to credit today and build it for the future. With responsible use of the card, you may be able to grow your credit score to qualify for more-desirable cards. Steps to improve your credit score include making all of your payments on time, applying for credit only when necessary, and keeping your credit utilization below 30%.

How to select the best credit card

When comparing the cards for which you’re eligible, choosing the best credit card depends on your goals, where you spend the most money, and if you’re willing to pay an annual fee. Here’s what to look for when selecting the right credit cards for your needs.

  • Annual fees. Many consumers prefer to save money by selecting cards that do not charge an annual fee. However, it may make sense to pay an annual fee to earn higher rewards and gain access to valuable benefits.
  • Welcome bonus. When you apply for a new credit card, it may offer a welcome bonus. You’ll earn the bonus by meeting the spending requirements within the allotted time frame. A typical requirement is to spend at least $3,000 within three months of opening your account.
  • Rewards offers. Rewards credit cards are popular because they earn bonus miles, points, or cash back on every purchase, increasing your earning power.
  • Bonus categories. Determine where you spend the most money, then select a rewards credit card that offers bonus points on those categories. Be careful of quarterly or annual limits that may restrict how much you can earn.
  • Intro APR offers. As a new cardholder you may be eligible for interest-free financing on purchases or balance transfers for a limited time. These promotions typically last between 12 and 21 months. Balance transfers often charge a fee of 3% to 5% on the amount transferred.
  • Benefits. Depending on which type of card you choose, it may include benefits such as airport lounge access, elite status, and travel or purchase protections. In some cases these perks can be more valuable than the rewards you earn.
  • Foreign transaction fees. Credit cards charge up to 3% on purchases outside the U.S. If you travel internationally, look for a card that waives foreign transaction fees.

What to do if your credit card application is denied

Even if you have perfect credit, it's possible that your application may be denied. Banks look at a variety of factors when evaluating credit card applications. These factors include:

  • Credit score.
  • Recent applications for credit.
  • Number of new accounts.
  • Income.
  • Monthly obligations.
  • Total credit limit from the bank.

If your application was denied, federal law requires the bank to inform you of the reason for your decision. While you may receive an immediate decision on your application when applying online, the denial letter may not arrive for a week or longer.

Typically, the explanations in these letters are fairly generic. However, when you cross-reference the letter against a copy of your credit report, you may be able to determine why you were denied.

Consider taking one or more of the following steps when your application is denied:

  • Call the bank's reconsideration line. You may be able to provide additional information or explain areas of concern to get your application approved.
  • Address the reasons for denial and reapply. Review the bank's letter and address the reasons why you were declined. The fix may be quick, or it may take time. Once the area has been addressed, reapply for the card you want.
  • Consider applying for a different card. Banks offer a variety of credit cards that target different consumer profiles. You may have better approval odds by applying for cards that match your credit profile. Secured credit cards generally are easy to get approved for because they require a security deposit.

TIME Stamp: Find a card that matches your goals, credit score and budget

The best credit cards offer lucrative rewards, 0% APR promotions, and valuable benefits for a reasonable annual fee. Finding the right card can be a challenge, so it helps to narrow down your choices based on what’s most important to you. Additionally, take your credit score into consideration, so you don’t apply for cards that require higher scores. While many people avoid credit cards with annual fees, paying one makes sense if the rewards and benefits outweigh the cost.

Frequently asked questions (FAQs)

What credit score do I need to get a credit card?

Banks offer credit cards for people with all levels of credit scores, even those who are just getting started with credit. However, many credit cards have minimum credit score requirements in order to get approved. To increase the chances of getting the card you want, take steps to improve your credit score before applying.

How do you apply for a business credit card?

You need to provide information about your business, such as annual revenues, tax ID number, and contact information. Most business credit card applications also require a personal guarantee, so you’ll be asked to provide your personal information as well. Business credit cards are available for all types of businesses, including corporations, LLCs, partnerships, and sole proprietors.

Can I I change one credit card for another without applying for one and cancelling the other?

Yes, if it's from the same credit card company. This is called a product change. As an example, you change the Chase Freedom Unlimited® for the Chase Sapphire Preferred® Card. It allows you to keep your rewards balance, credit limit, and credit history, while sparing you the hard credit inquiry, which could potentially hurt your credit score.

How do you apply for a secured credit card?

Secured credit cards help people with bad credit or a limited credit history gain access to credit. To apply, you provide your personal information and make a deposit with the card issuer. In most cases your credit limit equals the amount of your security deposit. With responsible use the bank may increase your credit limit or refund your security deposit and convert your card to an unsecured card.

How to get a credit card with no credit?

It is possible to get a credit card if you don’t have existing credit. Applying for a secured credit card is one of the best options for people with limited credit histories. If you are in school, student credit cards are designed for young adults who want to build a solid credit score but have limited income and credit experience. Getting a retail credit card or a gas credit card is also a good way to build credit.

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