Applying for a credit card is not difficult, but it involves risks. Once you have applied for a credit card, the credit card company will take a look at your credit history, monthly income, and all the documents that you have submitted. They will evaluate if you are capable of repaying the money you borrow.
Aside from meeting the eligibility requirements before submitting your credit card application, here are five other crucial things you should know to boost your chances of getting approved.
1. Determine your needs
There are different types of credit card available today, so it is crucial for you to determine what you need and can afford.
If, for instance, you will be buying huge and expensive items later on, opt for a credit card that offers 0% interest.
But if you are a regular spender, you can opt for cash back credit cards. Cash back refers to earning a certain percentage on the money you spend when using your credit card. Today, most credit card companies are offering this incentive. Some companies offer more cash back if you use your credit card when shopping online or when you enrol in quarterly promotions. In fact, this is one of the reasons people today want to apply for credit cards.
Remember, don’t rush!
Take your time when applying for a credit card. You need to assess your capability first so you can choose the right type of credit card. Do not just apply for the first credit card offered to you. Instead, you have to compare the different types of card and choose one that meets your financial needs and capacities.
2. Make comparisons
After you have decided which type of card to apply for, compare all possible options. For instance, compare the interest rates on cash advances or purchases, rewards programs, annual fees, and complimentary insurances. This way, you will better understand the benefits and costs of each card.
It is crucial for you to make comparisons because this will help you narrow down your options. Most importantly, this will make sure that you are choosing a credit card based on a well-informed decision.
3. Build a good credit profile
Credit card issuers will be using a credit rating system to assess your card eligibility and determine the card limit. They will decide how much you can borrow depending on your repayment habits, credit history, and current credit lines.
Before submitting your application, it would be best to request for a copy of your credit history. This will give you the opportunity to validate and correct any errors on the document and see what the credit card company will be looking at if they assess your application.
In case your credit history is less than ideal, it is highly advisable that you delay your application and build a good credit history to boost your chances of approval in the future.
Here are ways to build an excellent credit score:
- Set a budget – You need to know how much you are spending on a monthly basis. From there, set a budget and make sure to stick to it by adjusting your expenses. This way, your monthly bills will not exceed your income.
- Always pay your bills in full and on time – Make sure to pay your monthly bills in full and on or before the due date to avoid any interest charges. Be aware that delayed payments can negatively affect your credit profile. To prevent this from happening, use your mobile devices and calendar to notify and remind you of your bills.
4. Open an account with your credit card provider-to-be
It is crucial for you to open a debit account or a savings account with the bank where you plan to apply for a credit card. This can hasten your future credit card application process. Also, if your salary is sent in this account monthly, this can serve as proof that you have a regular source of income.
5. Fill up the application form honestly
When you are ready to apply, it is time to fill out the application form. When doing so, be honest and extra careful.
The application form will ask a lot of information about you. Make sure to input everything correctly. Read through it repeatedly to ensure that there are no mistakes because any incorrect or untruthful entry will result in a rejected application.
For instance, you have to state your actual income. And if you have different income sources, make sure to include this in your application.
Your credit card application will be successful only if you equip yourself with the right information, whether you are applying for the best premium card, visa platinum card or a cash card credit card. So remember these important considerations if you are thinking of applying for a credit card later on. Good luck!