Before applying for a credit card, it is helpful to research the eligibility requirements 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.
Eligibility for a Credit Card
When applying for a credit card, it can be challenging to determine if you are eligible for the card. When credit card companies issue credit cards, it is done with the agreement that you will repay what you purchase. Your credit history, as reflected in your credit report, informs credit card companies about how likely you are to meet your financial obligations.
Credit Score
As a general rule, the better your credit history, the greater your chances of obtaining a credit card. One way creditors assess 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 indicates the likelihood that a person will repay loan payments on time and pay off their debts.
Little or No Credit History
If you are applying for a credit card for the first time or have no credit history, it may be difficult 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 where a certain amount is held on deposit with the credit card issuer to secure the credit limit of the card.
Comparing Credit Card Options
Shopping around can help you find a credit card that suits your needs and spending habits, as well as your credit profile.
How to Apply for a Credit Card
There are several ways to complete a credit card application: online, using a paper form, or over the phone.
Personal Information
First, you’ll need to provide the credit card company with some personal information. The application will likely ask for: your name, date of birth, social security number, physical address and email address, phone number, and mother’s maiden name.
Income Information
Next, information about your annual household income will be requested. This is your gross annual income. You will also need to inform the credit card company where this income comes from (such as employment, self-employment, or unemployment benefits). You may have the option to select “other” if your income does not come from any of those sources. For example, if you receive alimony, child support, disability benefits, or veteran’s benefits, all of that can be used as income sources for a credit card application.
Housing Costs and Status
Credit card companies are also interested in what you spend on housing monthly 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 in rent or mortgage each month, and how long you have lived in your current place.
Authorized Users
If you wish to add an authorized user to your account, you may have the opportunity to do so when applying for a credit card. To add an authorized user, you will need to provide their name, address, and date of birth.
Once you complete these fields on the application, you can submit it to the credit card company. Again, if you are doing this online, you should be able to get a decision within a few minutes. If you are sending a paper application, it may take several weeks to get a response.
What
If you apply for a credit card and get rejected?
If you were unable to obtain approval for a credit card on the first attempt, credit card companies are required to inform you in writing of the reasons for the credit denial. When explaining the denial, you also have the right to know which credit bureau provided the credit report that was used in the decision. You can then contact that bureau for a free copy of your credit report.
Once you have your report, carefully review it for any errors or inaccuracies that may negatively affect your credit. If the denial was due to negative but accurate remarks in the credit report, or if you do not have a long credit history, you can ask the credit card company to reconsider the decision. If they deny your request again, you can focus on improving your credit to increase your chances of approval next time.
Frequently Asked Questions
How to apply for a credit card?
Applicants can apply for a credit card online with the credit card issuer, but to qualify, you will often need to provide proof of income and have a good credit history and strong credit background.
How can I qualify for a credit card without a credit history?
If you are applying for a credit card for the first time and do not have a credit history, a secured credit card can help as it requires a cash deposit held with the credit card issuer as collateral. The credit limit usually matches the amount held. Secured credit cards can help build your credit history and increase your credit score.
What should I be aware of when choosing a credit card?
It’s important to consider what you want from a credit card, such as cash rewards, fuel points, and travel rewards. You should also look at the annual fees, interest rates, and monthly payments to ensure you can afford the amount you are considering borrowing.
Source: https://www.thebalancemoney.com/how-to-apply-for-a-credit-card-4773835
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