How to Apply for a Credit Card
Applying for a credit card is pretty straightforward, but you might need a little help finding the right card and knowing how applying can impact your credit score. We’ll explain the steps and what you need to know.
You can take out a credit card for a wide range of reasons, and there are lots on offer. Once you’ve picked the right type of card, you'll want to find the best deal available.
Here we explain the steps you need to go through in order to apply for a credit card.
What kind of credit card do you need?
The first decision to make when looking at credit cards is the kind of card you want, and if you even need one at all. There are lots of different types, and it’s important to find the right card for you.
For example, if you will pay the balance off in full every month a cashback or rewards card, which you can use for all your everyday spending, could be a good option. Whereas if you have a poor or non-existent credit score, a credit builder card or a credit card for bad credit might be best.
How a credit card can impact your credit score
When it comes to your credit score and taking out a new card, there are a few questions to focus on.
Will applying for a credit card affect my credit rating?
When you apply for a new credit card, a mark is made on your credit score. This happens whenever you apply for credit, be it a credit card, store card or a loan. Therefore it’s worth using a free eligibility checker first. These can give you an indication of which credit cards you will be eligible for and the kind of interest rate you are likely to pay without leaving a footprint on your credit report.
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What if I change my mind?
You’ll have a cooling-off period if you change your mind. If approved for a new credit card, you have 14 days in which you’re allowed to reconsider without this affecting your credit score.
When is the best time to apply for a credit card?
There’s no "best" time to open a credit card. However, depending on your circumstances, there may be times when it is better, or worse, to do so:
- If you're looking to begin building a credit history, opening a card can be a good way to start. And using it responsibly can be helpful if you want to borrow in the future to get a mortgage to buy your first home, for example.
- Conversely, if your credit score has suffered a hit, it might not be the best time to apply for more credit. Better to repair your credit first.
It’s always worth keeping in mind long-term financial goals, and being on top of your credit score when thinking about opening any type of new credit.
Does applying for more than one card impact my credit history?
If you apply for multiple new cards in a short space of time, you may damage your credit score because it could look to a lender as though you are desperate to borrow more and that you may not be able to pay it back.
How to apply for a new credit card
- Before you apply, check your credit score through one of the reporting agencies: Equifax, Experian or TransUnion. This will give you an idea about the kind of card you will be able to get, and it’ll also alert you to any mistakes on your credit report.
- Use an eligibility checker to see the kind of card you will be able to get, and the interest rates available.
- You are now ready to apply, but before you do make sure you read all the terms and conditions. The provider needs to tell you all the costs involved with a card, including those if you fail to meet the terms and conditions of the card — such as if you are late with payments or go over your credit card limit.
Rebecca Goodman is a freelance journalist who has spent the past 10 years working across personal finance publications. Regularly writing for The Guardian, The Sun, The Telegraph, and The Independent. Read more