Tips for Applying for a New Credit Card
Applying for a new credit card benefits those who want to establish credit or add to their existing credit file. You can't guarantee that a credit card company will accept your application and send you a new credit card. But there are ways to increase your chances of being approved for a new line of credit.
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Open a Bank Account
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The decision to open a bank account doesn't impact your credit score. However, credit applications do ask for bank account numbers -- or at least the name of your financial institutions. Leaving this information blank implies that you do not have a bank account, and the absence of an account may make a creditor nervous about approving you for a credit card. Being able to acquire and manage a bank account looks good on credit applications. If you don't have a bank account, get one.
Check Finances
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A careful and honest review of your personal finances is crucial before applying for a new credit card. Getting a new line of credit will likely result in a new monthly bill, and if you barely have enough money to meet your present expenses, new credit isn't the wisest choice. Credit card companies do take your household income into account when approving your credit application. But don't rely on them to determine whether you can afford a new credit card. You know your monthly expenses better than anyone else.
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Compare Offers
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Before applying for a card, read the fine print and know the terms for multiple credit card offers. For example, does the credit card have an annual fee? Is there a grace period? What's the minimum finance charge? Does the credit card offer a rewards program or cash-back bonus? Compare offers to make the best choice for your situation.
Credit Report Updates
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Some people acquire a credit card to help improve their credit rating or build a credit score. This can only happen if your credit card company reports to the credit bureaus regularly. Prior to submitting a credit card application, call the company's customer service number and inquire about whether the company reports to all three bureaus, and if so, how often.
Credit Denials
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A credit card company may deny your application. Call the company and ask for an explanation. This gives you an opportunity to make improvements and reapply down the road. Mistakes on your credit report increase the chances of being denied for credit. Do yourself a favor and order a free copy of your report from Annual Credit Report and check the report for outdated information or errors.
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References
- Photo Credit credit card image by feisty from Fotolia.com
