The Ultimate Guide: How To Apply For A Credit Card

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How to apply for a credit card can be a challenge if you don’t have a strong credit history. Once you understand the requirements for applying for a credit card and understand the features of each card, you’ll be in a better position to succeed during the application process.

The process for how to apply for a credit card is not a complicated one but there are a few things to consider and keep in mind. A credit card can be incredibly helpful, when used responsibly. If you want to make purchases online, book a hotel or flight, a credit card is generally required as a debit card generally won’t work in any of these situations.

Credit cards can also be a useful tool in building your credit score so that you can eventually get a mortgage for a house or take out a loan. Credit cards also have a downside in that they charge very high interest rates so if you aren’t able to pay the entire balance off each month, then you risk falling into a debt trap and subject to high interest payments on your card balance, which can cripple you financially if it’s not managed

Below we outline the steps on how to apply for a credit card and what information you’ll need to have on hand before applying. Getting approved for the card is a different story though, there are a number of different criteria that banks use to determine eligibility and they can vary from bank to bank. 

The Basic Requirements 

You are legally required to be at least 18 years old to apply for a credit card, but generally most banks require an applicant to be 21 years old with a steady job and ideally a track record of timely payments on a student or car loans. The main thing that the banks will be looking at is whether you have the income to make payments on the card. 

Some of the basic requirements that you need include:

A Social Security number:

You’re required to have a social security number to establish your credit history. Non-citizens without a social security number are less likely to get a credit card. If you’re not a US citizen you may still be able to apply for a credit card but it would be a secured credit card. You can review the requirements and application form for a Social Security number here.

Income:

Banks aren’t going to lend you money if you don’t have the means to pay it back. One of the requirements is to state your monthly income when you apply for a credit card. There are situations where the bank may also ask for proof of income (such as w-2 or pay stub). If you are a full-time student, you may not have a full-time job, which is fine. Income earned from a part-time job is fine as well, it just may mean that the credit limit the bank is willing to give you is lower.

A positive credit history:

There are two types of credit cards, secured and unsecured. The unsecured types require you to have a positive credit history and is the type of credit card most people have. Most expect the applicant to have a credit score of at least 700. However, some cards accept lower credit scores but be aware that this usually means higher fees, and interest rates. 

It’s a good idea to inquire what your credit score is before you apply for a particular credit card. If you have a poor credit score, then you should opt for a secured credit card or look for credit cards that can be utilized for people with low credit scores. Most secure credit cards will require you to provide anywhere from $200 to $1000 as a deposit to secure the credit card. 

How To Apply for a Credit Card

How Do You Access Your Credit Score? 

There are two main credit score models, FICO Score and VantageScore. People with credit cards already have access to their FICO scores online or on their monthly statements. Alternatively, you can check your credit score on Discovery as the platform allows people to check their credit score. FICO and VantageScore are more or less the same as they use data from the same credit bureau and track credit scores with similar measurements. 

Choosing The Right Card 

There are thousands of credit cards currently in the market. So, how do you find the right one?

  •  If you’re applying for your first credit card, one way is to approach your current bank. Since your current bank already has your personal information and a history of doing business with you, they are more likely to approve your credit card application. 
  • The next step in choosing the right card entails evaluating the terms and conditions before applying for the card. You should never apply for a credit card without looking at the terms and conditions. One of the terms that you look at is the credit card fees. Most cards don’t have an annual fee, but some do. Some people choose to pay a yearly fee because they come with generous rewards. Other fees you need to watch out for include late fees, foreign transactions, and balance transfer fees. Ultimately, ensure that you understand every intricate detail of the application before applying. 

How To Apply for A Credit Card 

Once you find a card that’s suitable for your needs, the next task is to fill the basic credit card application. You can fill in the application online or sometimes via a paper application. 

The typical questions that you get from a credit card application include:

  • Name, date of birth, social security number 
  • Gross annual income 
  • Current address 
  • Your housing situation 
  • Date and signature 

This information helps prove your identity and determine how much disposable income you have, which will determine your credit limit. Along with income, banks consider how long you’ve lived at a location to determine your financial stability. Statistically, people who have lived in one place for a long time tend to have a higher credit score and pay their debts on time. If you keep moving house frequently, it may communicate that you have trouble holding down a job. That’s not to say that they will not give you a credit card. But, it may impact your credit limit.

Some additional questions that may be on the application include:

Authorized users: You can add an authorized user in your application form. The bank may ask for their names and other factors such as their social security number and birth date. The authorized user will also receive a credit card and can use it to make purchases. But note that the limit will be shared between you both. It’s important to note that the authorized users are not consignors, and you’ll be required to make all the payments on the account. 

Balance To Transfer: Depending on the card, you may be allowed to transfer a balance from another card. In that case, you’ll have to key in information such as your account number, payment address, transfer amount, and creditor’s name. 

Most banks require you to be a U.S citizen or permanent resident to apply for a credit card. Still, some banks will accept an Individual Taxpayer Identification Number (ITIN), which is the number that residents and non-residents use to file their taxes. 

What is Next After the Application 

Credit card applications are straightforward. Therefore, when you apply online, you are likely to get an instant notification, or you may have to wait for a couple of days. Once you get the card, you can use it to build credit by paying it off in full each month. Be sure not to fall into the trap of only paying the monthly minimum. That will lead you into financial trouble. Always pay the entire balance off each month. 

If you opted for a rewards credit card, then there are some benefits that you’ll eventually get to enjoy. For starters, you get rewarded by spending money on the card, with some cards offering cashback on purchases. Such as 5% on grocery stores and 1% on other purchases. Just be mindful that any reward you receive for spending on a credit card will not outway interest if you can’t pay the full balance each month.

What if Your Application is Denied? 

If your application is denied, there are some steps you can take to try to get it approved. You can try reaching out to the bank and ask them to reconsider. Maybe there was an error in your application or potentially some information you left out. It’s also a good idea to ask why your application was denied as then you know what you need to change for the next time you apply. The bank may not disclose why your application was denied but it doesn’t hurt to ask.

There’s intense competition in the credit card industry, and even though you may have one bank decline you, you’re likely to find a different bank that’s eager to build relationships with new customers. If you were declined from a starter card, you could try applying for a secure card. Secure cards tend to be less stringent on their applicants, provided you can prove your identity and pay the deposit. 

Be careful not to apply to too many cards, everytime you apply for a credit card a credit check is performed on you and too many credit checks in too short of a time period can negatively affect your credit score.

Remember To Keep Your Card Secure

Once you manage to receive a credit card, you need to keep it secure. Avoid taking pictures of it or letting others borrow it.

Also, keep an eye on your transactions. Make a habit of scrutinizing your statements to check for fraudulent transactions. If you find any, then contact your card issuer and report it. 

The Bottom Line

Credit cards can be an important tool for your finances, but applying for one can be a challenge if you don’t have a credit history. Once you understand the requirements for applying for one and understand the features of each card, you’ll be in a better position to succeed during the application process. 

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