How To Get A Credit Card
A credit card is a financial tool that affects many areas of your personal finance. It is often needed when you deal with many business entities. For instance, airlines, hotels and rental car agencies require a credit card when you want to make a reservation. Credit cards provide a wide range of benefits. Depending on the card, these benefits can include rewards and cash backs, purchase protection, travel insurance, and many more. If you would like to get a credit card that fits your needs, the information below can help you.
Issuers of Credit Cards
Credit cards can be issued by banks, credit card companies and credit unions. Retailers and department stores can also issue credit cards, but these branded cards are usually only good for the specific store.
Types of Credit Cards
In searching for the right credit card, think about the features that you need. Do you want one that charges the lowest interest rate? Are you more interested in earning points that you can redeem for travel incentives? There are numerous categories of credit cards on the market. Here are examples of different types that you can expect to find.
- Standard credit cards that offer low interest rates or balance transfer
- Cards that offer reward programs, which can include cashback on every purchase or points that you can redeem for a wide range of goods and services
- Cards that award you frequent flier miles on major airlines
- Cards that are specially designed for a specific demographic group, such as college students or small business owners
Secured credit cards are designed for people who have no credit or poor credit and who do not qualify for an unsecured card. These require you to put down a cash deposit that serves as collateral. You get a line of credit commensurate with the size of your cash deposit. Secured credit cards can be obtained from your bank or your credit union. This is a good option for people who want to start improving their credit score.
Credit cards can provide a combination of benefits from several categories. You should think about the features that are important to you so that you can narrow your search. You should also search for credit card reviews on the type of card that you want so that you can find the best ones in that category.
Applying For Your Credit Card
If you want to apply for a specific credit card from a specific financial institution or retailer, you can usually find an application on the issuer's website. If the issuer has a physical location in your neighborhood, you can fill out an application in person as well. However, if you want a wider range of options, there is a better way to find the card that you want.
There are websites that partner with various banks and card issuers to serve as a portal to the different types of credit cards available from these institutions. These sites save you time in your research by allowing you to screen and compare credit cards conveniently without going to each issuer first. When you find a card that you like and click on the respective link, you are directed to the issuer's secure website where you can fill out an application online.
The actual application process is usually quite easy. Typically, you will need to provide your basic personal and household information, employment information, monthly income, bank accounts and other financial information. Be sure to read over the terms and conditions thoroughly so that you will have a clear understanding about the fees, the annual percentage rate, the grace period, and your obligations. If you have any questions, contact the credit card issuer. When you submit your application, your information will be encrypted to ensure its secure transmission.
Improving Your Chances Of Getting Credit Approval
Before you apply for a card, there are things that you can do to improve your chances of getting approved for credit.
Maintain a good credit history and check your credit report for errors. A healthy credit history shows the lender that you are reliable in your loan payments. Errors in your credit report can negatively impact your chances of getting credit approval. Therefore, correct any mistakes right away.
Strive to use only about one-third of your available credit. If a card issuer sees that you have a tendency of using a lot of your credit, you might be seen as a bad risk.
Avoid applying for too many cards at once. Every time a card issuer makes an inquiry on your credit history, it is recorded in your report. Too many inquiries will lead a lender to think that you are at risk of carrying too much debt.
Do not change your employment too often. If you do, card issuers might have doubts about the stability of your income, which will lead them to question your ability to make payments on time.
If you do not qualify for an unsecured credit card because of your credit history, you have another option. As mentioned earlier, you can get a secured credit card and use that to start rebuilding your credit score. Just be sure to pay your monthly charges completely and on time. As your credit score improves, you can look again into applying for the unsecured card that you want.
It is not difficult to get a credit card. When you have the right information, you can find a card that is appropriate for your financial needs.