how to apply for a credit card

How to qualify for a credit card

Having a credit card is not only useful when shopping, but it also has benefits such as discounts, point awards or it may sum up miles to travel with. Here is what you need to know before you apply for one.

Choosing the right credit card

Different credit cards offer different benefits and charge different fees. Evaluating all the options can help you find the credit card that best meets your spending needs and habits, as well as your credit profile.

Each new application for credit results in a hard inquiry on your credit report. This can trim a few points off your credit score, so it’s not something you want to do many times. Here are things to bear in mind before applying for a credit card.

The first step to decide what card is right for you is to start by evaluating the features and benefits. Ask yourself what you expect from a card. If it rewards you are interested in, for example, you'll need to decide first what kind of rewards you want to earn. This could be, cashback, miles, or travel points. Discounts at different stores may be another thing to consider.

The next thing to bear in mind is to compare the interest rates you'll pay for purchases, balance transfers, or cash advances. If a card offers a 0% introductory promotional rate on purchases or balance transfers, be sure to ask how long the promotional period lasts and what the regular interest rate will be after it has ended. 

Another thing to take into account is the fees. The most important fees to consider include the annual fee (if any) the balance transfer fee if you're planning to transfer a balance, and the foreign transaction fee, if you want to use your card overseas. 

Once you have decided on the type of card you're looking for, your credit history will be essential to know how likely you are to qualify for it. Even though credit card companies usually don't specify a minimum credit score needed to qualify,  they may indicate which cards are designed for fair credit, good credit, or excellent credit. Being aware of your credit score can be a guide for choosing a card.

Carefully evaluating all these things before applying for a credit card can help you choose the right one. So take your time and analyze all your options thoroughly.

Applying for a credit card is not complicated, but the bank will need to be sure that you can pay back the money you spend. To evaluate this, there is some information the bank will request to be able to inquire about your credit report.

Applying for a credit card online is convenient and you can get a decision almost immediately but you can also apply in person, by mail, or on the phone. In any of these cases, this is the information you will need to fill out in your application.

See also: Helpful money management tips for new graduates

Step by step

1. Personal Information

First, the bank needs to verify your identity, that you are at least 21 years old (or older than 18 and have proof of income) and make sure thay have a way to contact you.  The application will likely ask for:
•    Your name
•    Date of birth 
•    Social security number
•    Physical address and email address
•    Phone number

2. Income Information

Next, you'll be asked about your gross annual income. You'll need to tell the credit card company where this income comes from, i.e. employment, self-employment, or unemployment benefits.  Choosing "Other" may be an available option if your income comes from another source such as alimony, child support, or veterans' benefits for example. 

3. Housing Costs and Status

Credit card issuers are also interested in how much you spend on housing each month and whether you rent or own. There may be a section on the application where you are asked if you are an owner or not, and also how much you pay for rent (if you do so) or how much your mortgage payments amount to each month. 

See also: A complete guide of activities to combine health and money
4. Authorized Users

To add an authorized user, you'll need to fill in their name, address, and date of birth. 

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