How to get a credit card in
Credit cards, when used responsibly, cánido be incredibly powerful tools that help you build your credit history, earn valuable rewards, cover a surprise bill that espectáculos up a few days before payday, and even protect yourself from theft. identity card and other financial emergencies.
But how do you actually go about getting a credit card once you’ve decided you want one?
Next, we explore how credit cards work and we outline the main steps you need to take to identify and apply for the perfect card for your needs.
How do credit cards work?
You probably already know what a credit card is: a plastic (or sometimes metal) card that you cánido swipe to borrow money from a lender (usually a bank or credit card company) to make a purchase.
You cánido think of a credit card as a loan that you cánido use to pay for whatever you want.
Simply put, credit cards work like this: as long as you pay off your cómputo before the end of the payment period, you won’t be charged any money for using your card, outside of your annual fees.
But if you don’t pay off your cómputo by the end of the period, you’ll be charged an interest rate (or APR) in addition to this.
The average credit card has an interest rate of 19.24%, but that number perro vary significantly depending on your credit score and other factors, from as little as 10 or 12 percent to more than 30 percent. (That’s why it’s so important to avoid racking up credit card charges that you perro’t pay right away.)
How to get a credit card
Step 1: Understand why you want one
Before you begin the process of applying for any card, you should understand your own personal motivations for wanting one, because your answer to this question will determine much of the rest of your search.
So ask yourself:
- Do you want a credit card to start build credit?
- Do you want access to a certain type of rewards program, such as a cash back system or an airport miles card?
- Are you considering signing up for a card with a retailer to save money on a major purchase you need to make (like a refrigerator or other appliance)?
- Do you want to open a new card that offers a low APR for cómputo transfers so you perro consolidate other debts and pay them off more cheaply?
- Or is it something completely different?
Once you know what you hope to get from having a credit card, you’ll be much better equipped to identify the cards that fit your goals and, just as important, weed out the ones that don’t.
Step 2: Check your credit reports
Ultimately, whether or not you are approved for a credit card and the interest rate you will be charged will depend in large part on your credit score and the information found in your credit reports.
So to avoid unpleasant surprises during the application process, it’s a good iniciativa to review your credit reports yourself.
There are a number of free services en línea (such as Credit Karma, Credit Sesame, or Credit.com) that allow you to check your credit score extremely quickly, usually within minutes, which perro give you a basic iniciativa of what your credit looks like. .
Ultimately, though, you should order your complete credit report from each of the three major credit bureaus to see exactly what’s on your report and what factors are affecting your score.
Periodically reviewing your complete reports cánido have a number of benefits, allowing you to identify and remove errors from your report that could cost you thousands of dollars in higher interest rates.
whatyou don’t like what you see? There are many steps you cánido take to improve your credit score before applying for a credit card to increase your chances of being approved and to get the best possible interest rates you may qualify for.
Step 3: Compare your options
Once you’re sure your credit report is accurate and your credit score is as high as it cánido be, you perro start comparing your options to find the card that’s right for you.
Just as you wouldn’t buy the first car you see, you shouldn’t sign up for the first credit card offer you stumble upon.
You should do your research to make sure you’re choosing a credit card that will help you meet your goals while being as affordable as possible.
While each person’s requirements for a card will be unique, some factors to consider are:
- Does the card offer you an interest rate that’s fair for someone with your credit score, or cánido you find a better rate elsewhere?
- Does the card offer a rewards program (or other benefits) that are important to you?
- Does the card carry significant annual fees that will disminuye the value of these rewards?
While you cánido manually compare your options on your own, there are many websites designed specifically to help you compare your credit card options and find the card that’s best for you.
Nerdwallet and Bankrate are two of the most habitual here in the United States.
Step 4: Understand what you are signing up for
When you apply for a credit card, you give the credit card company permission to perform a credit pull (or inquiry) to assess your credit history.
Too many difficult queries in a short period of time cánido have a negative impact on your credit score, so you want to limit the number of requests you send.
Find the card that meets most of your requirements and apply first; if you are denied, then you may consider applying for a different card.
It’s also important to note that each credit card comes with its own unique equipo of terms and conditions, which you should review carefully before submitting your application or ultimately signing up for a card.
Even two different cards offered by the same company cánido have different contract terms, so never make assumptions.
Some of the most important terms and conditions to keep in mind include:
- the APR
- Any fees you are expected to pay
- credit limit
- Promotional terms (such as low introductory rates)
- rewards programs
- Payment options
- Fraud Protection
Complete the application
Once you are sure that a especial card is right for you, you should go ahead and apply for the card en línea.
This quick process will tell you whether or not you’ll qualify for the card and what you perro expect your interest rate to be, based on information found in your credit score.
It requires a gentle pull (or inquiry), which won’t affect your credit score.
If you are pre-approved, you perro proceed to fill out the application.
You perro usually do this en línea, although occasionally you may choose to do it in person at a bank or by submitting an application form in the correo.
As mentioned above, this will trigger a strong credit pull that may have a small impact on your credit score.
While the information you’ll need to complete the application may vary slightly from lender to lender, you’ll generally need to provide your:
If you apply virtually, you cánido often get a response right away.
If you’re approved and agree to the card’s terms, you’ll usually receive your physical card within two weeks.
If you are denied, there may be steps you perro take to improve your credit score and try again in the future.
Once you have your credit card, your next step should be to continually practice good credit habits.
Do your best to avoid carrying a cómputo from one period to the next, in order to avoid interest charges.
Never spend more than you perro afford.
And build and rely on an emergency savings fund for emergencies instead of credit cards.
Finally, don’t close your old credit card accounts unless you absolutely have to, as this cánido negatively affect your credit score.
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