Holly Bennett
Ceri Roberts
Adam French
Applying for a credit card is usually a straightforward process that you complete online or in person at a branch of the relevant bank.
While it shouldn’t take long to fill out the application, it’s well worth shopping around for the best credit card deal and taking time to check your credit score and eligibility. This will help you find the card that’s right for you – and boost your chances of being approved.
Choose a credit card
There are a few different types of credit cards, and each is designed for a certain purpose.
- Credit builder cards may be a good option if you want to repair your credit score, or if you have a limited credit history.
- Purchase cards usually offer low, or 0%, interest rates for a set time, which can be helpful if you need to spread the cost of an expensive purchase.
- Balance transfer cards could help you save money on interest for a set time when you transfer an existing credit card balance onto a new, low-interest (or interest-free) card.
- Money transfer cards can work like a low-interest (or interest-free) loan when you transfer money from the card to your bank account. These can be used to clear something like an expensive overdraft.
- Travel credit cards are best used for holidays as they typically offer good exchange rates, and you won’t be charged extra fees for making purchases in another country.
- Reward credit cards provide offers such as air miles, vouchers or cashback when you make a purchase.
Next, think about how you plan to use your card.
- If you would like to transfer a balance from an existing card, or plan to pay off your balance over time, look for a low or 0% introductory interest rate.
- If you usually clear your balance each month, higher-interest reward credit cards and travel credit cards could help you save money on fees or enjoy extra perks.
» MORE: What credit cards are there and how do they work?
Credit card eligibility
Once you’ve chosen a credit card that suits your needs, take a few minutes to check that you meet the eligibility criteria. Lenders’ basic criteria vary, and verification and credit checks also play an important part. But generally, you’ll need to be:
- Aged at least 18 or 21.
- A UK resident with a permanent UK address.
- Earning a minimum monthly income.
- Not declared bankrupt or have any recent individual voluntary agreements (IVAs) or county court judgments (CCJs).
Eligibility checkers
An eligibility checker can help you find out how likely you are to get the credit card you want. You may also be given an idea of the credit limit and APR you can expect to be offered.
It’s quick, easy – and free – to check your eligibility online via the provider or broker. Crucially, an eligibility check won’t show up on your credit report, which means other lenders won’t be able to see any evidence of your search. Although it might seem like an unnecessary extra step, this will help you target your applications, keeping them to a minimum. Making multiple credit applications can reduce your chances of being accepted for credit.
Check your credit score
Your credit score is a three-digit number that helps lenders decide whether to offer you credit. A high score typically means that you’ve had credit in the past and managed it well. If you have never had credit, perhaps because you’ve just turned 18 or recently moved to the UK, you will probably have a lower credit score. This means a lender may see you as a higher risk because it can’t see any evidence that you have previously borrowed money and paid it back.
Several factors can harm your credit score. If you’ve missed payments, exceeded credit limits or defaulted on a credit agreement, this will all be recorded on your credit report. each time you apply it’s recorded on your credit report, and lenders may view multiple applications as a sign that you’re experiencing financial difficulties.
This is why it’s best to keep the number of credit card and loan applications to a minimum. You can check your credit score before you apply for a credit card to help reduce the risk of an unsuccessful application. For example, there may be an error on your credit report that you can ask to be corrected or steps you can take to improve your score before you apply.
You can check your credit score for free with credit reference agencies like Experian and Equifax, or via platforms like ClearScore and Credit Karma. It doesn’t matter how often you check it, this won’t affect your credit score.
» MORE: Tips for improving your credit score
Compare costs
Now that you’ve worked out which credit card suits your needs and established the applications most likely to be accepted, you’re ready to compare the key features and decide on the best deal for you.
The following details are important to consider:
- Fees and charges: This includes the fee for going over your limit or paying late, using the card abroad, and for returned payments (when payment can’t be collected). There may also be an annual fee, and charges for making balance and money transfers.
- The interest rates charged on balance transfers, purchases and cash withdrawals.
- Is there an introductory interest-free (or low-interest) period and, if so, how long it lasts, and the rate you’ll pay afterwards.
- The minimum monthly repayment you must make.
- The annual percentage rate (APR), is the amount you will be charged in fees and interest over a year if you don’t clear the total balance each month.
Apply for a credit card
When you’ve followed all the steps set out above, you’re ready to make your application.
You can usually apply online, in a branch at a bank or building society, over the phone or by post.
You will need to supply basic financial and personal details, such as:
- Address details for the last three years.
- Bank account details.
- Details of your income.
- Contact details, including email address and phone number.
The provider will then run a credit check with a credit reference agency. Because it is a hard check, this will leave a mark on your credit history.
If your application is successful, you will need to sign a credit agreement. If you apply online you can do this digitally, but if you apply in a branch, by post or over the phone you will be sent paperwork to sign and return.
Before you sign, read the small print to check your credit limit, interest rate, details of fees and charges and the minimum payment amount. Don’t sign unless you’re happy with all the terms and conditions. If you’ve changed your mind you’re under no obligation to sign the agreement, and can simply walk away.
If you sign the forms but later change your mind you have a 14-day cooling-off period. This means you can cancel the agreement without giving a reason why. If you have borrowed any money you will need to pay it back, along with any applicable interest.
How long does it take to get a credit card?
If you’ve applied online, you could find out if your application has been successful in a matter of seconds. However, different lenders have different policies, so it could take a few hours or even a few days before you get a final decision.
Once approved, your card and PIN will be sent out in the post. This could take up to 10 business days to arrive. However, some providers will offer instant credit via a virtual card that you can add to your digital wallet. This means you can use your card right away.
What to do if your application is declined
You might be offered an alternative credit card if your application is declined. This may have a higher rate of interest and lower credit limit. If this happens, be clear on the terms of the offer before going ahead.
If you receive a flat refusal, it could be for a number of reasons, including:
- Information from your credit file shows a high amount of credit on other accounts, missed payments, or times when you exceeded your credit limit.
- Fraudulent activity or mistakes on your credit file.
- Too many applications for credit or loans over a short period.
- A lack of credit history can make it hard for lenders to assess how likely you are to repay what you borrow.
- Financial links to someone with a poor credit history.
- Failing affordability checks because you don’t have a high enough annual income, or haven’t been in your job for long enough.
- Lenders can’t verify your identity because you’re not on the electoral roll.
A lender probably won’t tell you exactly why you’ve been turned down, but it’s worth asking which credit reference agency it used. You can then contact the agency and ask for a copy of your report, look for any issues and take steps to improve your score before you apply again.
Resist the temptation to apply for other credit cards right away. You may be rejected once again, and making several applications in a short time – even if some of them are accepted – could damage your credit score.
Working on your credit score, using eligibility checks before applying and taking time to complete the forms correctly can help put you in a better position next time around.
If you’re looking for credit because of financial difficulty, be aware that borrowing money could make your situation worse.
Rather than taking out a new credit card or loan, consider seeking free debt help from charities such as:
A range of help is available, including the ‘Breathing Space’ scheme, which can give people who live in England and Wales a break from interest and charges while they get their finances back on track. In Scotland there’s a similar scheme called the Debt Arrangement Scheme. There are plans to establish a Debt Respite Scheme in Northern Ireland following a public consultation, but it isn’t yet available.
» COMPARE: Credit card eligibility
Dive even deeper
How to Transfer Credit Card Balances
There are three simple steps to transferring your credit card debt to a balance transfer card, but before you go ahead it’s vital to compare the amount you would save on interest with any transfer fees you need to pay.
What is a Credit Card?
If used correctly, a credit card can be a convenient way to borrow money to pay for goods and services. There are several different types available, including balance transfer cards and credit cards for bad credit, which is why it makes sense to shop around to find the one that’s right for you.
3 Reasons to Cut Up Your Credit Card and 3 Reasons to Keep It
Cancelling your credit card may seem the obvious next step if you’ve managed to pay off your balance in full. But there are several factors you need to consider before deciding whether to get rid of your card, including the effect it could have on your credit history.
Rhiannon Philps