You’ve heard why it’s important to have a credit card. But how do you apply for a credit card — and actually get approved?
Figuring anything out for the first time can be hard, but you have to start somewhere. The basic steps to apply for a credit card are pretty straightforward:
- Check your credit score and identify credit cards for which you can qualify.
- Compare credit card costs and features and pick one that best fits your needs.
- Complete and submit a credit card application.
- Get approved for the card (hopefully) and receive your credit card by mail.
- Activate your new credit card and spend wisely!
Getting ready to apply for a credit card
It’s important to know not only how to apply for a credit card — but how to get approved. When you learn how the credit card application process works, you can avoid common credit card application mistakes. You can also be more selective about the credit cards you apply for and improve your chances of qualifying.
Here’s what you should do to prepare before applying for a credit card.
1. Know what’s important for credit card applications
How do companies decide to approve or deny credit card applications? Credit card issuers a process called underwriting. They verify your information and decide if you meet the criteria to get a credit card.
Some credit card types or credit card companies will have more strict approval requirements. When you know what credit card companies look for, you can quickly see how you measure up. Here’s what they typically look at:
- Credit score: You probably know that your credit score and credit reports will be important for credit card applications. Issuers usually like to see at least an average credit score (around 600) or higher.
- Credit reports: Companies will also look at your credit reports to see how you’ve handled other debts. They look for a long history of on-time payments and responsible borrowing. So missed payments, high levels of borrowing, or a thin credit file could scare them off.
- Income: Most credit card applications will also consider your income. They want to ensure that you can afford to pay off any credit card balance your borrow. A higher income will always work in your favor. You can still get approved for a credit card with a modest income, just expect to have lower credit limits on your cards.
2. Figure out your credit score
The first thing you’ll want to figure out it how credit card issuers view you. Maybe you’ve got a decent credit score thanks to a parent’s help in building your credit. Or you could be like me — before I got my first credit card, my credit score was in the 400s.
Either way, you’ll want to get a copy of your credit report and check your credit score. Then, figure out how bad or good your credit score is:
- 579 and below is poor or bad credit
- 580 to 669 is fair or average credit
- 670 to 739 is good credit
- 740 to 799 is excellent credit
- 800 and over is exceptional credit
The higher your credit score, the better chance you’ll have to get approved for a credit card. So, if your credit score is poor, you might want to try to improve it before applying for the card you want.
3. Review your credit report
In addition to your credit score, credit card companies will also look at your credit history and details on your credit reports. Get free copies of your credit report and review them to see what’s on there. You’ll want to know about potential negative marks or errors.
Here are some factors credit card companies will look at on your credit report to evaluate your credit card application:
- Payment history: The biggest deal is your history of making on-time payments. You’ll look best with a credit report free of late or missed payments and delinquencies.
- Credit utilization: Try to keep low credit card balances compared to your credit card limits. Shoot for balances equal to 30 percent or less of your credit limit.
- Recent inquiries: These show when lenders have checked your credit as part of processing an application. The fewer inquiries, the better.
- Credit history length: It will help if you have one or more older accounts of at least 2-3 years or older. Lenders don’t like a short or thin credit history.
- Account types: Lenders want to see that you have responsibly used several types of credit. A mix of credit cards, lines of credit, and installment loans is ideal.
The credit card company will use this information from your credit report to get a better idea of whether or not you’d be a safe or risky bet for credit.
You can survive one or two negative marks on a credit report if you have other positives working in your favor. But more than that could spell trouble for any credit card applications. It might be worth it to spend some time repairing your credit before applying for a credit card.
4. Find credit cards you’ll qualify for
Now that you know how you’ll look to credit card companies, you can start searching for the best credit card for you. You’ll need to spend some time researching credit cards to find a few for which you qualify.
We’ve highlighted some of our favorite credit cards in our marketplace. You can also perform an internet search for credit cards that match your credit score. Local banks and credit unions will often have unique credit card offers with helpful features.
- Good or excellent credit: The world is pretty much your oyster. If you have a high income to match, you can apply for most credit cards and get approved.
- Average or fair credit: You might want to be choosier about the credit cards you apply for. Check credit card reviews to ensure you meet the typical credit score requirements.
- Poor or bad credit: Your best bet will probably be a secured credit card. For these cards, you make a cash deposit as collateral on your credit card balance. But you’ll also need a chunk of change to secure the card.
You can narrow your options down further by applying to pre-qualify for a credit card. Most issuers have a form on their site that you can complete to see cards that are a good fit.
5. Compare credit cards to find the best fit
Once you have a pool of a few credit cards for which you could qualify, it’s time to choose the one that best suits your needs. You can compare different credit card features and decide which ones are most important to you.
The first thing to look at is credit card costs. Try to choose a low APR, especially if you think you’ll carry a balance and won’t always avoid credit card interest. Your interest rate or APR will depend on the type of card, as well as your credit score. An average credit card interest rate is currently around 16.53% APR.
Check the annual credit card fee, as well. These can range from $0 to over $100 a year. And check credit card fees on services you plan to use like balance transfers, cash advances, or foreign transactions.
If you have a few low-cost credit cards to choose from, look at the perks you’d get from credit cards. This could include sign-up bonuses like free miles or an account credit for using the card right away. Or it might be the chance to earn cash-back rewards on your everyday purchases year-round.
How to apply for a credit card, start to finish
When you’ve found the option that’s the right balance of low costs and helpful perks — it’s time to apply for a credit card. The process to apply for a credit card is not overly complicated. Most credit card applications take 10 minutes or less to complete.
How to get a credit card application
You have the option to apply for a credit card online or in-person if the issuer has a branch or location near you.
If you choose to apply for a credit card online, you can simply visit the site for the credit card issuer. There will be several links and buttons that will take you to an application — look for phrases like “Apply Now.” You’ll be taken to an online form with fields for you to complete and submit.
First, make sure your connection is secure — the address should start with https (not http). There should also be a lock or similar security symbol displayed in the site address bar.
Alternately, you can call the credit card issuer or visit a branch to request paper credit card applications. They should include instructions on how to submit the application and return it to the card issuer.
What information do you need to apply for a credit card?
Each credit card company has its own underwriting process and requirements for getting a credit card. So the information you’ll need for an application will vary.
But there are some common pieces of information you’ll always need to supply. You should be ready to give the following details:
- Your full name and date of birth
- Identifying information like your Social Security number and mother’s maiden name
- Contact details including your current address, email, and phone number
- Employment status, occupation, gross income, and current employer’s name
- Type of bank accounts you have
- Whether your rent or own and the dollar amount of this expense
If you apply for a credit card online, the form usually includes text that further explains different fields. Should you get stuck on a section or aren’t sure what it’s asking for, contact the credit card company.
Represent yourself and your personal information accurately. Lying on credit card applications is credit card fraud — and is illegal.
The application will also include a disclosure of credit card fees, rates, and conditions. Carefully review this disclosure. Make sure you understand the terms and features of the credit card, as well as your responsibilities as a cardholder.
You also might need to agree to let the issuer check your credit or contact you through the information provided.
What income can you list on a credit card application?
When filling out a credit card application, it can be tricky to estimate your gross income and know what to include. Most credit card applications will have a brief explanation of the kinds of income you can report on the application. For example, you don’t typically need to include alimony or child support.
You’ll usually want to include your total income from different sources, according to CreditCards.com. Figure out how much income you earn from the following:
- Your gross income
- Your spouse’s gross income
- Spousal support
- Government benefits like social security or disability income
- Investment earnings or retirement distributions
- Financial gifts or allowances
Add up the amounts from the incomes listed above. You’ll also need to convert your pay to the period indicated, like monthly or annually. This will give you the gross income you can report on your credit card application. The issuer will use this to decide if you can afford a credit card and how high they can set the credit card limit.
Unlike a loan application, a credit card usually won’t require proof of income. But some credit card issuers will check your state income against an estimate of your pay with income modeling. This uses information on your credit report to predict your income.
How long does it take to get approved for a credit card?
After you’ve completed your credit card application, it’s time to submit. The company will receive and review the information and decide whether to approve or deny your application.
If you apply for a credit card online, you might get an instant response. It will automatically compare your application to its requirements and determine if you qualify. You’ll get a message right away indicating if you’ve been approved, rejected, or if your credit card application will be further reviewed.
Other credit card issuers will have humans, rather than computers, review your credit card applications. In this case, it usually takes a few days to review and process the application. Once they do this and decide, you’ll get an email notification. You can also contact the issuer to check up on the progress of your credit card application.
What to do if you’re rejected for a credit card
If you’re rejected for a credit card, it can be frustrating. But don’t give up hope — you can still get a credit card somewhere else.
You’ll need to reapply, but don’t panic and send out a slew of applications. This will put hard inquiries or credit checks on your credit report, which could actually lower your chances of approval. Try to space out your credit card applications at least by a month or more.
Figure out these reason for the rejection. You’ll get a statement from the credit card company that will specifically state why you were turned down for a credit card. Then you can figure out how to address this issue and improve your chances of approval on your next credit card application.
If your credit score or reports are the problem, you have two options. You can try re-apply with a credit card for a lower-tier credit score, like a secured credit card, college credit card, or retail card.
Or you can spend some time working to improve your credit. It can help to pay down debts, especially current credit card balances. Often, simply letting some time pass while making on-time payments can boost your credit score. You can keep an eye on your credit and re-apply after you’ve made some progress.
Receive and activate your credit card
Upon approval of your credit card application, the issuer will create a new credit card tied to your account and mail it to you. You’ll usually get a credit card by mail within 10 days of approval.
But you can’t use your new credit card right out of the envelope. To protect you and prevent your new credit card from theft or fraud, credit card issuers don’t send active cards. You’ll need to activate the credit card to “turn it on” so you can make purchases with it.
Included with the credit card will be instructions on how to activate your credit card. There’s typically a sticker on the card with a website to visit or a phone number to call to activate the card. Visit the site or call, and you’ll be taken through the necessary steps to verify your identity and activate the card.
Congratulations! You now have a shiny new piece of plastic that you can use to start spending. Enjoy it — just not enough to regret filling out any credit card applications to begin with.
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|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
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