Apply for a Credit Card
Looking to apply for a credit card? You’ve come to the right place. We’ve collected all the tips, tricks, links and advice you’ll need to apply for a credit card–and get accepted! This quick list of easy-to-follow steps will provide a clear path for applicants of any credit score. Whether you’re new to the credit card arena or a seasoned veteran looking for better options, we can point you in the right direction. Don’t become overwhelmed by stress or confusion when attempting to apply for a credit card. As long as you have some basic ground knowledge (which we will supply), the process should be quick and painless. With that in mind, here are NerdWallet’s 7 easy steps for folks looking to apply for a credit card.
1) Check your credit score
Before you begin looking at credit cards, it’s helpful to know which you’ll be eligible to obtain. Issuers look at your credit history to determine whether you’ll be a trustworthy cardholder. They want customers who will be able to make payments and return what they borrow. By looking at an applicant’s credit score, lenders can quickly assess how likely the person is to keep up with payments. Credit scores range between 300 and 850. Poor credit is 300-619, fair credit is 620-659, good credit is 660-749 and excellent credit is 750-850.
Once a year, federal law entitles you to a free credit report from each of the 3 major credit bureaus. You’re also eligible for an additional free report every time you’re rejected for credit. To access your free credit report, jump on over to AnnualCreditReport.com. Getting a free credit score is a little trickier. There are a ton of websites that can deliver your credit score, but they all charge membership fees. Fortunately, most of these sites offer a grace period during which they charge nothing. The trick is to sign up, get your credit score and immediately cancel your account during the trial period. We suggest trying TransUnion ($19.95/month, 7-day grace period) or GoFreeCredit.com ($16.95/month, 30-day grace period).
If you want an all-in-one deal, try GoFreeCredit’s PrivacyGuard: It gives you scores from all three credit bureaus at once ($14.99/month, 30-day grace period).
2) Set your expectations
Once you know your credit score, you can determine the best card for your creditworthiness. If you fall in the “excellent” range, congratulations–you can qualify for almost any card. That means awesome rewards, reasonable fees and low APRs. If your credit is merely “good,” you’ll still have a decent selection of cards, many of which will offer substantial rewards. Folks with “fair” credit are more restricted and might not qualify for cards with all the bells and whistles. And finally, poor credit, as you might suspect, is severely limiting. If your score is really low, you may have to start with a secured credit card. Secured cards work similarly to regular unsecured cards but require a refundable security deposit. The minimum deposit is usually a couple hundred bucks. The issuer holds onto your money in case you can’t make payments. Secured credit comes at no risk to the lender, so just about anyone can qualify. No matter how dismal your credit score, be wary of cards with outrageous rates. A person with poor credit should never sign up for an APR that exceeds 30% or an annual fee greater than $50. There are far cheaper options for bad credit. Don’t be fooled.
3) Learn to read a Schumer Box
When sifting through credit card offers, it is essential to know how to read a Schumer Box. A Schumer Box, which can usually be found under “Terms and Conditions,” organizes vital information in a standardized format. It contains the APRs, grace periods, annual fees, transaction fees and more. Once you’ve looked at a few, you’ll get the hang of it pretty quick. Be sure to ALWAYS read the Schumer Box before applying. It’s the easiest way to spot red flags. Check out our infographic on how to read a Schumer Box.
4) Decide what is important to you
There is no one-size-fits-all credit card. Different cards have different features to suit different consumers. Are you looking for stellar rewards? Or a super low APR? Do you have a balance to transfer? Maybe you’re just sick of paying an annual fee? Credit cards have many, many facets to consider. Here are a few of the big ones. Rewards: If you have the luxury of choosing between reward programs, realize there are many different types, and you should select the one that best fits your spending patterns. Within the travel rewards category, some cards will earn money on purchases at a specific airline or hotel chain, while others offer rewards for more general travel purchases. If you’re interested in earning on everyday transactions, the range spans from gas to groceries to movies to dining. Once you know how you’d like to earn your rewards, decide how you’d like to spend them. Do you want cash back? Or are gift cards okay? Free flights? Hotel stays? The possibilities are vast. Purchase APR: The purchase APR is always an important factor. Obviously, the lower the better. But if you plan on making a large purchase in the near future, you may want to consider a card with a long intro APR period. Some cards won’t make you pay a dime in interest for a year or more. This is extremely useful when making a purchase that will take some time to pay off. Transfer APR: Some cards are crafted specifically for people who already have a large balance. By transferring your balance to a new card, you may be able to put a freeze on interest for up to 15 months. Of course, you’ll have to pay a balance transfer fee, but you’ll often save a bundle of money in the long run. Fees:Understandably, some people don’t want to mess around with fees. Annual fees in particular can be a bit off-putting. There are a lot of great no-fee cards out there, and some of them even offer rewards. Another common fee people look to sidestep is the foreign transaction fee. A foreign transaction fee will usually charge an extra 3% on every out-of-country purchase. International travelers can greatly benefit from a card that waives the fee.
5) Read credit card reviews
If you go directly to the credit card’s website, you’ll find nothing but carefully crafted advertisements that make the card seems infallible. While this can be a good place to start, make sure you look at plenty of reviews before applying. NerdWallet, for example, prides itself on in-depth credit card reviews that deliver the hard truth about today’s financial products. Web forums are also an invaluable tool. It’s great to see what actual cardholders have to say. Forums may confirm the card’s merits or present surprising evidence to the contrary. Inform yourself with opinions before making a definitive selection.
6) Submit an application
It’s time to apply for a credit card! Before you submit sensitive personal information over the Internet, make sure the website seems secure and is operated by a trustworthy, recognized company. If you have doubts, consult Google or choose another option. A credit card application is not worth identity theft.
7) Be patient
If you get rejected, don’t despair. There’s a card out there for you somewhere. You may have to settle for lower rewards or a higher APR, but remember, it’s only temporary. If you’re not satisfied with your card, use it for a while, raise your credit score and get a new one. And a word of caution before we release into the credit card world: don’t apply for too many cards at once. Each application damages your credit score, and submitting a ton of applications simultaneously looks slightly suspicious. Apply only for cards that are realistically within your grasp. That said, go forth and apply for a credit card. Good luck!